China's Jan-Apr pig iron output grows 9% on year

China's pig iron output grew 8.7% on year to around 306.7 million tonnes over January-April this year, according to new data released by the country's National Bureau of Statistics (NBS) on May 17. The growth in output was lower than the 15.8% on-year rise in the country's crude steel output during the period but higher than the 8% on-year growth for the first three months, Mysteel Global noted.

In April alone, domestic pig iron output recorded an on-year increase of 3.8% to reach around 76 million tonnes, which was also 1.6% higher on year. On a per day basis last month, pig iron output had recovered to a relatively high average of 2.53 million tonnes/day, which was higher than the 2.41 million t/d average in March, Mysteel Global calculated based on the data.

"It is not so surprising to see such high pig iron output, as almost all steelmakers are trying their best to lift productivity to enjoy the skyrocketing steel prices and incredibly healthy steel margins," a Shanghai-based analyst commented.

Mysteel's survey also showed this trend, with the average blast furnace capacity utilization rate among the 247 Chinese steel mills Mysteel tracks recovering to 89.93% over April 23-29 from an almost one-year low of 86.92% over March 26-April 1.

As of April 30, the national price of HRB 400 20mm dia rebar, for example, was assessed at Yuan 5,255/tonne ($816.5/t) including the 13% VAT, higher by a huge Yuan 344/t on month. And during April, the sampled mills' profit margins on rebar had reached Yuan 719/tonne on average, up another Yuan 253/t from the prior month, as reported.

In tandem with the growth in pig iron output, the prices of raw materials had also seen upticks over the past month, particularly those of iron ore.

Mysteel's SEADEX 62% Fe Australian Fines price, for example, leapt to its 11-year high of $193.65/dmt CFR Qingdao, in East China's Shandong, on April 27. And as of April 30, the index was still at $187.2/dmt, or up $21.8/dmt on month.

"In fact, steel mills are using more medium- to higher-grade iron ore products to elevate their production," the analyst also added.

As of April 30, China's national composite coke price had also recovered to Yuan 2,266.5/tonne including the 13% VAT, or up by Yuan 171.4/t on month, according to Mysteel's assessment.

Meanwhile, many Chinese blast furnace mills had continued to consume more ferrous scrap to maintain high levels of steel output, which also saw Mysteel's steel scrap price index as of April 30 rise to its 9.5-year high of Yuan 3,473.1/t on delivery and including the 13% VAT, or up by Yuan 224.9/tonne on month.

Written by Victoria Zou, zyongjia@mysteel.com

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