The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel’s regular tracking slid for the fourth straight week to reach 82.58% during March 8-14, lower by another 0.53 percentage point from the previous week, with negative steel margins making more mills rein in production.
During the same period, the daily hot metal output among these sampled steelmakers also dropped 14,300 tonnes/day or 0.6% on week to 2.21 million t/d, the survey showed. Their average operational rate however gained 0.55 percentage point on week to 76.15%, as some idled furnaces in North China were brought back onstream after the country’s “Two Session” political meetings ended earlier this week, Mysteel Global learned.
More steelmakers across China started to lose money amid the slump of finished steel prices recently, which cooled their enthusiasm for production, Mysteel Global noted.
For example, the national spot price of HRB400E 20mm diameter rebar was assessed by Mysteel at Yuan 3,718/tonne ($523.8/t) including the 13% VAT as of March 14, falling by a significant Yuan 160/t or 4.1% on week, due to the sluggish demand from steel users.
By the same day, only around 21% steel mills of the 247 tracked steelmakers managed to make some profits on steel sales, lower by 3 percentage points from the previous week, according to Mysteel’s survey.
In tandem with their output reduction, the daily average consumption of imported iron ore among these 247 mills decreased for the fourth consecutive week by another 21,900 t/d or 0.8% on week to reach 2.7 million tonnes over March 8-14, the survey showed.
The slower iron ore consumption was also reflected in the mounting inventories of the feedstock at these mills, Mysteel Global noted. By March 14, the total stocks of imported iron ore held by the sampled 247 mills rose for the fourth straight week by 98,600 tonnes to 92.7 million tonnes, which would be sufficient to last them for 34.3 days at their present consumption rate, longer by 0.3 day from the previous period, as Mysteel assessed.
Source: Mysteel Global
