WEEKLY: China's BF capacity use rises further as mills' profit margins improve
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The recent uptick in finished steel prices plus lower production costs saw profit margins among Chinese blast-furnace (BF) steelmakers improve somewhat, encouraging some mills to ramp up production further, Mysteel's lates survey showed.
During April 4-11, the BF capacity utilization rate among the 247 steelmakers under Mysteel's regular tracking had increased for the second straight week by another 0.44 percentage point on week to hit a more than four-month high of 84.05%.
During the same period, the daily average hot metal output of these sampled mills also climbed by 11,700 tonnes/day or 0.5% from the prior week to reach 2.25 million t/d, while their operational rates averaged 78.41%, higher by 0.6 percentage point on week, according to the survey.
Steelmakers' enthusiasm for production picked up as some more mills could earn money on steel sales, Mysteel Global noted.
As of April 11, around 38% of the same 247 steelmakers managed to make profits on the sales of finished steel, higher by some 5 percentage points from the previous week.
By the same day, China's national spot price of HRB400E 20mm dia rebar gained Yuan 67/tonne ($9.4/t) on week to reach Yuan 3,681/t including the 13% VAT, Mysteel assessed. Meanwhile, the continuous decline in coke buying prices eased the cost pressure on steel mills, Mysteel Global noted.
In tandem with the production ramp-up, domestic steel mills' demand for feed materials expanded as well, with the daily consumption of imported iron ore among the 247 steelmakers under Mysteel's survey rising 24,700 t/d on week to 2.8 million t/d over April 4-11.
By April 11, the total inventories of imported iron ore in all forms held by these steelmakers stood at 93.2 million tonnes, rising 396,500 tonnes on week, the survey showed. This would be sufficient to last them for 33.8 days at their present use rate, shorter by 0.2 day from the prior period, as Mysteel assessed.
Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.
