China's blast furnace capacity use largely stable at 84.75%

The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel's regular tracking stood largely flat on week at 84.75% during December 15-21, or dipping 0.08 percentage point from the prior week. Thinning margins continued to dampen steelmakers' enthusiasm for production, Mysteel Global noted.

During the survey period, daily hot metal output among these sampled steelmakers also slipped 2,200 tonnes/day or 0.1% on week to 2.27 million t/d, while their operational rates averaged 77.71%, lower by 0.6 percentage point on week.

Many mills across China have been continuing their annual routine maintenance works on their blast furnaces, market sources observed. Meanwhile, some steelmakers scaled back output in response to their narrow margins squeezed between higher production costs and softening steel prices, Mysteel Global learned.

For example, as of December 21, Mysteel PORTDEX 62% Australian Fines in Qingdao had increased Yuan 19/wmt ($2.7/wmt) on week to reach Yuan 1,026/wmt FOT and including the 13% VAT, touching a new high since mid-April 2022. On the same day, China's national spot price of HRB400E 20mm diameter rebar was assessed by Mysteel at Yuan 4,055/t including the 13% VAT, losing Yuan 22/t on week.

As a result, among the 247 steelmakers tracked by Mysteel, only 33.8% managed to earn some profits during December 15-21, lower by 1.7 percentage points from the previous week.

During the same period, domestic steelmakers also reduced their consumption of iron ore as they slightly cut production, Mysteel's survey showed, with the daily consumption of imported iron ore among the 247 sampled steel mills dipping 10,900 t/d on week to average 2.77 million t/d.

As of December 21, total imported iron ore inventories held by the 247 mills Mysteel tracks mounted to 94.9 million tonnes, edging up 418,900 tonnes from the previous week. The stocks would be sufficient to last 34.3 days of their use at current consumption rate, longer by 0.3 day than in the previous period, as Mysteel assessed.