China's Blast furnace capacity use largely stable at 89.12%

The blast furnace capacity utilization rate among China's 247 steelmakers under Mysteel's regular survey remained largely steady at 89.12% over May 12-18, or up by a tiny 0.09 percentage point on week after prior four weeks' constant declines, as some steelmakers had gradually resumed operations on improved profit margins.

During the survey period, these sampled mills produced 2.39 million tonnes/day of hot metal on average, up 1,100 t/d on week, and their blast furnace operational rate also increased by 1.26 percentage points on week to 82.36% as of Thursday.

Some steel mills' profit margins have been improved recently thanks to the lower production costs caused by falling prices of steelmaking raw materials, which gave them some confidence to resume operations over the survey period, according to a Shanghai-based market watcher.

Moreover, though downstream steel demand has not showed significant improvement, it was not as bad as the market had expected. This to some extent lessened the bearish sentiment in the domestic steel market and provided some support to uphold the steel prices, Mysteel Global noted.

As of May 18, Mysteel's assessment of the national price of HRB400E 20mm dia rebar increased by Yuan 26/tonne ($3.7/t) on week to Yuan 3,838/t and including the 13% VAT.

By the same day, nearly 33.33% of the 247 surveyed mills had managed to earn some profits, with the rate increasing by 9.52 percentage points on week, according to Mysteel's assessment.

Meanwhile, the steady capacity use saw daily consumption of imported iron ore among these surveyed mills stay largely unchanged too, down by a tiny 300 t/d on week to 2.9 million t/d on average as of May 18.

As of Thursday, 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 decreased by 217,700 million tonnes on week to 86.93 million tonnes. The stocks were sufficient to last them for 29.93 days of use, or 0.04 day shorter than the previous survey period, Mysteel's tracking showed.

Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com

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