China's hot metal output to rebound in March

For the remainder of March, daily output of hot metal among 247 Chinese steelmakers Mysteel regularly checks is projected to rise, taking this month's production to reach 2.27-2.29 million tonnes/day on average.

Mysteel's survey on the 247 mills found that during this month, 40 blast furnaces (BFs) are to be brought back online from maintenance with their capacity totalling 139,000 t/d, while 8 furnaces involving a total capacity of 44,300 t/d will be put under scheduled maintenance.

Generally, Chinese steelmakers start resuming their BF operations since January after previous annual maintenance works are completed, and their operations gradually ramp up afterward to brace for the seasonal boom in the country's steel finished consumption during spring.

For the coming weeks, the actual recovery pace of hot metal production will be primarily determined by mills' profit margins on selling finished steel, Mysteel understood.

In fact, Chinese steelmakers' enthusiasm for lifting their hot metal output has turned weaker so far this year, and some mills that were suffering deeper losses in steel sales had even idled their BFs since mid-February, as reported.

Consequently, the 247 Chinese steelmakers produced an average of 2.22 million tonnes of hot metal during 1-7 March, with the volume logging three straight weeks of falls, Mysteel's latest weekly survey result showed. And the current output level was also 6% lower than a year earlier.

Fundamentally, finished steel inventory levels at mills and traders in the near term will impact steel margins and the increase in steel output in turn, Mysteel warned.

During 1-7 March, stocks of five major finished steel products at traders' warehouses in 132 Chinese cities under Mysteel's tracking had increased for the 12th week to reach 29.3 mnt, being higher by another 2% on week and 16% higher than the same period of last year.

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