China's Blast furnace capacity use stable at 85.3%

Blast furnace (BF) capacity utilization among China's 247 steel mills under Mysteel's survey remained largely stable at 85.3%, or down for the second successive week over August 20-26 but just 0.17 percentage point on week, as most of the steel mills had varied their operations little over the week, still adhering to Beijing's call for lower steel output, and spot steel sales stayed subdued too.

During the survey week, these 247 mills' daily molten iron output eased accordingly by 4,600 tonnes/day on week to 2.27 million t/d in total, and their daily consumption of imported iron ore decreased too for the second week by another 6,100 t/d on week to 2.77 million t/d on average, according to Mysteel's survey.

"Market sentiment is still bearish with Beijing's determination on lower crude steel output this year," a Shanghai-based market watcher said, and "some steel mills in central and Northeast China also joined in the production cuts, idling five more blast furnaces," she added.

Despite so, the operational rate of the blast furnaces at the 247 mills reversed from one week of decline, up 0.65 percentage point on week to 74.22%, according to Mysteel's survey.

"Over the past week, we did observe that some blast furnaces, especially some small-sized ones in the northern and southern regions, had resumed operation after the maintenance, so the rebound in the overall operational rate is understandable," the Shanghai source explained.

By August 26, inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water, decreased for the fifth week by 455,500 tonnes on week to 105.5 million tonnes, as Chinese mills are overall cautious with their in-house iron ore stocks with the ongoing steel output cuts, and the tonnage will be sufficient for around 38.12 days of consumption, or 0.08 day shorter on the week but still a rather normal range.

Over the same survey period, Mysteel's smaller-scale study on China's 163 steel plants, however, showed that their blast furnace capacity utilization rate reversed from one week of dip, up but by a tiny 0.16 percentage point on week to 69.39%, according to the database. Mysteel will terminate the release of the data towards the end of this year.

Written by Lindsey Liu, liulingxian@mysteel.com

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