China's blast furnace capacity use largely stable at 79.6%

The blast furnace capacity utilization rate among 247 Chinese steel mills under Mysteel's regular survey remained largely stable over July 29-August 4, reversing from six weeks of declines, though it was up by merely 0.3 percentage point on week to 79.6%, as some steelmakers had gradually resumed operations amid recently-improved market sentiment.

During the survey period, these sampled mills produced 2.14 million tonnes/day of hot metal on average, also up 7,300 t/d on week, and their blast furnace operational rate also increased by 1.09 percentage points on week to 72.7% as of Thursday.

"Recently, the recovered downstream steel demand and strengthened steel prices largely boosted Chinese steel-market sentiment and further narrowed some mills' negative margins or even made some of them enjoy profits," a Shanghai-based market watcher commented.

For example, the national price of HRB400E 20mm dia rebar, a bellwether of Chinese steel-market sentiment, was assessed by Mysteel at Yuan 4,275/tonne ($633.6/t) including the 13% VAT as of Thursday, up Yuan 125/t on week.

In tandem, nearly 42% of these surveyed mills had managed to earn some profits by Thursday, with the rate increasing for the third straight week by another 22.94 percentage points on week.

Accordingly, the daily consumption of imported iron ore among these mills edged up by 16,900 t/d on week to 2.62 million t/d on average, Mysteel's data showed.

As of August 4, total inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water held by the 247 mills increased by 1.06 million tonnes on week to 97.7 million tonnes. The stocks were sufficient to last them for 37.41 days of use, or 0.16 day longer than the previous survey period.

Written by Lindsey Liu, liulingxian@mysteel.com

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