The Coal Trader

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China’s Blast Furnace capacity rebounds after 10-week drop

The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel’s regular tracking ended a 10-week drop and rebounded to 82.56% during January 5-11, higher by 0.97 percentage point on week. More mills in the country resumed production from maintenance stoppages during the survey week, Mysteel Global learned.

During the latest survey period, daily hot metal output among these sampled steelmakers increased by 26,200 tonnes/day or 1.2% on week to reach 2.21 million t/d, and their operational rates averaged 76.08%, gaining 0.45 percentage point from the previous week.

“Some mills in (North China’s Hebei) have completed their routine maintenance works and restarted operations this week,” a market analyst based in Shanghai explained.

In tandem, daily average consumption of imported iron ore among the 247 steelmakers Mysteel tracks also increased by 27,400 t/d or 1% on week to reach 2.69 million t/d during January 5-11.

On the other hand, the iron ore inventories piled at the yards of these steelmakers kept rising, as the mills ramped up their procurement of iron ore to build up sufficient feed stocks for their production during the eight-day Chinese New Year holiday that will arrive in just a month, Mysteel Global observed.

As of January 11, the total inventories of imported iron ore held by the 247 sampled steel mills grew 2 million tonnes or 2% on week to reach 99.8 million tonnes, Mysteel’s survey showed. The stocks would be sufficient to last 37.1 days of their use at present consumption rate, longer by 0.4 day than in the previous period, according to Mysteel’s assessment.

However, as Chinese prices of finished steel products posted marked drops so far this week, more steelmakers in the country were losing money on steel sales, which may dampen their enthusiasm for production recently, the Shanghai analyst noted.

During January 5-11, only 26.8% of the 247 sampled steelmakers managed to earn some profits, lower by 3.5 percentage points from the prior week, according to Mysteel’s other survey.