China's blast-furnace capacity use falls to 15-month low

The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel's regular tracking had fallen for the 10th consecutive week during December 29 2023-January 4 to 81.59%, losing 1.16 percentage points on week and touching the lowest level since mid-August 2022. Steel mills in the country's northern regions further scaled back production amid cooled market activity, Mysteel Global learned.

During the same period, daily hot metal output among these sampled steelmakers also dropped 31,100 tonnes/day or 1.4% on week to 2.18 million t/d, the survey found.

Steel trading in northern China remained sluggish as most building sites there had shortened outdoor working hours due to the harsh cold in winter, which made local steelmakers less enthusiastic for production as well.

Accordingly, the consumption of imported iron ore among the 247 steelmakers under Mysteel's survey continued to decline during December 29-January 4, dropping 35,400 t/d or 1.3% on week 2.66 million t/d.

Although domestic steel mills' immediate needs for iron ore are weakening, their demand for winter restocking of the feed material has grown stronger as they want to build sufficient feed stocks for their production during the Chinese New Year holiday that will come in just about a month, Mysteel Global notes.

As such, the total inventories of imported iron ore held by these 247 mills increased by 2.59 million tonnes or 2.7% on week to reach 97.86 million tonnes as of January 4, the survey showed. The stocks would be sufficient to last 36.8 days of their use at present consumption rate, longer by 1.4 days than in the previous period, Mysteel assessed.

On the other hand, some steel mills in East China's Jiangsu and Shandong that halted production for annual overhaul previously have completed their work and resumed production this week, leading the total number of furnaces onstream to increase across the country, according to Mysteel's tracking.

During December 29 2023-January 4, the BF operational rates of the 247 domestic steelmakers under Mysteel's survey averaged 75.63%, higher by 0.44 percentage point on week.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.