China's blast furnace capacity use rises further to 77.9%

Over December 31-January 6, the blast furnace capacity utilization rate among China's 247 steel mills under Mysteel's survey climbed for the third week, rising by another 2.1 percentage points on week to 77.89%, as more blast furnaces in North and East China had resumed their operations, Mysteel noted.

During the latest survey period, these 247 mills produced a total of 2.09 million tonnes/day of molten iron on average, also up 55,100 t/d on week, and their BF operational rate also rose for the second week, up 3.19 percentage points on week to 74.2%.

The continuing growth in pig iron output was mainly because more BFs in North and East China resumed their production as the previous curbs placed on them had been gradually eased when local air quality improved during the week, according to a Shanghai-based market analyst.

Correspondingly, over December 31-January 6, daily consumption of imported iron ore among the 247 surveyed steel mills also grew for the second week by another 66,200t/d to total 2.6 million t/d on average.

During the past week, some Chinese steelmakers actively procured iron ore in the spot market, either for their production resumption or the smooth production during the Chinese New Year holiday over January 31-February 6, Mysteel Global observed.

By December 30, inventories of imported iron ore in all forms at the 247 surveyed mills including ore sitting at steelworks, port stockyards and on the water increased for the fourth week by another 792,800 tonnes on week to 110.6 million tonnes. And the total tonnage would be sufficient for 42.62 days of their consumption, or 0.8 day shorter on week.

The higher steel output and recovering demand for iron ore have firmly bolstered the iron ore prices over the past week, with Mysteel's SEADEX 62% Australian Fines, for example, having rallied to $127.55/dmt CFR Qingdao by January 6, or up $9.45/dmt on week.

Written by Victoria Zou, zyongjia@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.