Weekly: China BF mills rein in production as losses widen
...
Mysteel Global: Blast furnace (BF) production among Chinese steelmakers continued falling for the second week during 26 July- 1 August, 2024 with the decline being faster than the prior week, Mysteel's latest survey showed. Widened losses and pessimistic sentiment pressed the mills to cut production, Mysteel Global noted.
During the latest survey period, the average BF capacity utilisation rate among the 247 steel producers under Mysteel's regular tracking dropped by 0.74 percentage point on week to reach 88.87%, and their daily average hot metal output also decreased by 29,900 tonnes (t)/day (d) or 1.3% from the previous week to 2.37 mnt/d.
Over the same period, operational rates of these sampled mills averaged 81.28%, lower by 1.05 percentage points on week, the survey showed. Their rapidly worsening profitability forced the mills to scale back production, Mysteel Global noted. As of 1 August, only around 6% of the 247 steel mills under Mysteel's tracking could earn some profits on steel sales, a fast decline of 9 percentage points on week.
Additionally, with the effective date of China's new rebar standards getting closer, domestic steelmakers were fearing that their existing stocks of old-standard bars would not be totally consumed in the coming two months, so more mills decided to halt production this week, as reported.
In parallel with the reduction in hot metal, the daily average consumption of imported iron ore among the 247 steelmakers Mysteel tracks fell to 2.91 million t/d over 26 July- 1 August, down by 28,300 t/d or 1% on week.
On the other hand, steelmakers reduced their procurement of iron ore this week as replenishment demand retreated with the lower production. By 1 August, the total inventories of imported iron ore held by the same 247 mills in all forms dropped by 821,900 t or 0.9% on week to reach 91.2 mnt, which would be sufficient to last them for 31.4 days, still longer by 0.1 day from the previous period given their current usage rate, according to Mysteel's assessment.
Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.