The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel’s regular tracking changed little on week at 83.57% during January 26-February 1, though it picked up by a tiny 0.07 percentage point from the prior week.
Accordingly, daily hot metal output among these sampled steelmakers also nudged up 1,900 tonnes/day or 0.09% on week to reach 2.23 million t/d, the survey showed. Some mills in East China brought their idled furnaces back online after completing their maintenance work this week, Mysteel Global learned.
As such, daily consumption of imported iron ore among the same 247 steelmakers under Mysteel’s tracking averaged 2.73 million t/d during January 26-Februay 1, up by a small 100 t/d from the previous week.
However, compared with the number of furnaces put back onstream, more furnaces across the country were turned off for maintenance this week, though their total production capacity was smaller than that of the restarted ones, according to Mysteel’s survey.
Consequently, the average operational rate among the 247 steel mills lost 0.3 percentage point on week to reach 76.52% during the survey period, Mysteel’s tracking data showed.
The poor steel margins prompted some mills to reduce their production, Mysteel Global noted. Over January 26-February 1, only around 26% among these sampled 247 mills managed to earn some profits, 0.44 percentage point lower than in the previous week, Mysteel’s other survey showed.
Steel trading in the domestic market slackens as the Chinese New Year holiday (spanning February 10-17) is around the corner, so steelmakers’ enthusiasm for production has subdued as well, market sources observed.
Meanwhile, the mills were continuing to build their feed inventories to ensure they can maintain normal production during the holiday when iron ore traders close their businesses, according to Mysteel’s survey.
As of February 1, total inventories of imported iron ore held by the 247 steelmakers under Mysteel’s tracking rose for the seventh consecutive week by another 3 million tonnes or 2.9% on week to reach 108.2 million tonnes. The stocks would be sufficient to last 39.7 days for their use at present consumption rate, longer by 1.1 days than in the previous period, according to Mysteel’s assessment.
