China's blast furnace capacity use hits over 1-year high of 91.98%

The blast furnace (BF) capacity utilization rate among 247 Chinese steel mills under Mysteel's regular survey had climbed for the fourth straight week over June 23-29, edging up by another 0.38 percentage point on week to reach 91.98% - a new high since early March 2021. Chinese steel mills had been producing robustly to chase healthy profit margins, Mysteel Global learned.

During the survey period, daily hot metal output among these 247 mills totalled 2.47 million tonnes/day, up 10,300 t/d on week, while their BF operational rate stood unchanged on week at 84.09% as of June 29.

As China's steel prices had been buoyed by the bullish market sentiment, the country's BF mills were able to enjoy wider margins this week, Mysteel Global noted.

For example, the national price of HRB400E 20mm dia rebar under Mysteel's assessment settled at Yuan 3,839/tonne ($529.5/t) including the 13% VAT on June 29, up Yuan 38/t from June 26.

As such, over 64% of the sampled 247 mills managed to make some profits on selling steel products as of Thursday, 3.9 percentage points higher than the previous week, according to Mysteel's survey.

The mills' profitability also reached the highest level since late April last year, encouraging the steelmakers to lift their production further, Mysteel Global noted.

On the other hand, the daily consumption of imported iron ore among these mills remained largely stable at 2.99 million t/d during June 23-39, increasing only 2,100 t/d on week, according to Mysteel's tracking.

Meanwhile, some steel producers in North China reduced their procurement of imported iron ore sintering fines this week because they were requested by local authorities to curb sintering operations due to the worsening air qualities across the region, as Mysteel Global reported.

Consequently, total inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water held by the sampled 247 mills reversed from the previous two-week growth, down 298,500 tonnes on week to 85.44 million tonnes. The tonnage was sufficient to last the mills for 28.56 days of use, 0.12 days shorter than during the prior survey period.

Written by Anthea Shi, shihui@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.