China’s pig iron production totalled 871 million tonnes during 2023, up by a slight 0.7% from the previous year, according to the latest data released by the country’s National Bureau of Statistics (NBS) on January 17. Despite the uptick in pig iron production, China’s crude steel output stood flat on year, the data showed.
In December alone, China produced 60.9 million tonnes of pig iron, according to the NBS data. Consequently, on a per-day basis last month, production averaged 1.96 million tonnes/day, falling by a large 9.2% on month, Mysteel calculated.
The fast drop in pig iron output last month reflected the wide-ranging production curbs imposed on domestic blast furnace (BF) steelmakers in December, Mysteel Global noted.
During the last week of December, the capacity utilization of the 247 BF mills under Mysteel’s regular survey averaged 82.75%, losing 4.88 percentage points on month, while their hot metal output also dropped 5.6% on month to average 2.18 million t/d during the same period.
Many steelmakers reduced their production in response to their negative margins, as well as the slack demand from steel users, Mysteel Global learned.
By the end of December, only around 28% of the sampled 247 BF mills had earned some profits on steel sales, lower by 11 percentage points on month, according to Mysteel’s other survey.
Although Chinese steel prices firmed overall last month, the strong rises in iron ore prices significantly squeezed steelmakers’ profit margins and cooled their interest in production, Mysteel Global noted.
For example, by December 29, Mysteel PORTDEX 62% Australian Fines in Qingdao had settled at Yuan 1,040/wmt ($146/wmt) FOT and including the 13% VAT, higher by 4.6% from the end of November.
On the other hand, more mills in North China stopped operations to start annual overhauls last month as the frequent rains and snow falls in the deep of winter had disrupted road transportation in the region and forced local steel users to halt outdoor construction work, as reported.