China's blast furnace capacity use rises to 7-month high

Production among Chinese blast furnace (BF) steel mills ended a three-week drop and increased during this week, with more furnaces ignited after completing maintenance works, according to Mysteel's latest survey.

During June 7-13, the average BF capacity utilization rate of the 247 steelmakers under Mysteel's regular tracking gained 1.39 percentage points on week to reach 89.53%, refreshing the highest level since early November last year, while their daily hot metal output also averaged 2.39 million tonnes/day, higher by 35,600 t/d or 1.51% on week.

Over the same period, the average operational rate among these sampled 247 mills went up by 0.55 percentage point from the previous week to 82.05%, the survey showed.

The increment in hot metal production was mainly contributed by the mills in North China's Hebei and Shanxi, Northeast China's Liaoning, East China's Shandong, and Southwest China's Guangxi, which brought their furnaces back onstream from maintenance stoppages, Mysteel Global learned.

In parallel with the production ramp-up, daily consumption of imported iron ore among the same 247 steelmakers Mysteel tracks went up by 48,100 t/d or 1.7% on week to reach 2.93 million t/d during June 7-13.

As their immediate production needs expanded, the mills slightly increased their procurement of iron ore from traders, market sources observed.

By June 13, the total inventories of imported iron ore in all forms held by the 247 mills edged up 317,100 tonnes or 0.3% on week to 92.5 million tonnes, though the stocks would be sufficient to last them for just 31.6 days at their current use rate, shorter by 0.4 day from the previous survey period, Mysteel assessed.

On the other hand, profitability among domestic BF mills worsened as steel prices stayed on a steep downtrend, Mysteel Global noted.

By Thursday, only around 50% of the sampled 247 steelmakers could earn some profits on steel sales, lower by 3 percentage points from the prior week, Mysteel's survey showed.

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