The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel’s tracking over December 1-7 dropped for the sixth consecutive week at a faster pace of 1.88 percentage points on week to hit 85.75%, the lowest level since mid-February this year, as maintenance stoppages increased among domestic steel mills.
Accordingly, daily hot metal output among these sampled steelmakers also fell 51,500 tonnes/day or 2.2% on week to reach 2.29 million t/d during the latest survey period, and their BF operational rate averaged 78.75%, lower by 2.1 percentage points on week.
“A total of 19 (blast) furnaces across the country have been shut off for their annual routine maintenance this week, while only four idled ones were reignited,” a market watcher based in Shanghai explained.
Meanwhile, the weakening of finished steel prices earlier this week also made steelmakers across the country less enthusiastic about production, Mysteel Global noted. For example, China’s national price of HRB400E 20mm diameter rebar was assessed by Mysteel at a near three-week low of Yuan 4,051/tonne ($566.2/t) including the 13% VAT as of December 6, before it rebounded to Yuan 4,078/t on December 7.
The decline in steel prices has squeezed steel mills’ profit margins, Mysteel’s other survey showed, with only 37.2% of the sampled 247 mills being able to earn some profits during December 1-7, lower by 2.1 percentage points from the prior week.
As a result, during the same period, the daily consumption of imported iron ore among these 247 mills averaged 2.8 million t/d, lower by 64,300 t/d or 2.2% on week, according to Mysteel’s tracking.
The total imported iron ore inventories held by the sampled mills increased by 1.5 million tonnes or 1.6% on week to reach 94.6 million tonnes as of December 7, which would be sufficient to last 33.8 days of their use, longer by 1.3 days than in the previous period, as Mysteel assessed.
