The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel’s regular tracking continued falling for the third straight week, losing 0.23 percentage point from the prior week to reach 83.11% over March 1-7.
During the latest survey period, the daily hot metal output among these sampled steel mills also decreased by 6,100 tonnes/day or 0.3% on week to 2.22 million t/d, but their average operational rate picked up 0.41 percentage point on week to 75.6%.
Some steel mills in East and Southwest China shut off their furnaces to start routine maintenance this week, Mysteel Global learned. Even though more furnaces were brought back onstream after the maintenance works had been completed on them, the resumed capacity was smaller than that of idled furnaces, the survey showed.
Meanwhile, the rapid drops in the prices of domestic finished steel products pushed more steelmakers to the brink of losses this week, forcing some of them to reduce production, Mysteel Global noted.
As of March 7, for example, China’s national price of HRB400E 20mm diameter rebar was assessed by Mysteel at Yuan 3,878/tonne ($546.6/t) including the 13% VAT, lower by Yuan 105/t or 2.6% on week. By the same day, only around 24% of the 247 sampled steelmakers were able to make some profits on steel sales, losing 3 percentage points on week, Mysteel’s survey showed.
With steel mills cutting output under the pressure on negative steel margins, their demand for iron ore weakened in tandem, Mysteel Global noted.
During March 1-7, the daily consumption of imported iron ore among the surveyed steel mills Mysteel tracks averaged 2.73 million t/d, falling for the third consecutive week by another 9,400 t/d from the previous week.
By March 7, the total inventories of imported iron ore held by the same 247 steelmakers had also declined for the third straight week to reach 92.6 million tonnes, lower by 732,100 tonnes on week, according to Mysteel’s tracking. The stocks would be sufficient to last these mills for 34 days at their present consumption rate, shorter by 0.2 day from the previous period, as Mysteel assessed.
Chinese steelmakers remained reluctant to replenish iron ore stocks as they saw slow recovery in the downstream steel demand, market sources observed.
Written by Anthea Shi
