The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel’s regular tracking ended a six-week rising streak and pulled back to 83.59% over February 16-22, lower by 0.38 percentage point from the prior week, with maintenance stoppages and narrow margins both impacting steelmakers’ production, Mysteel Global noted.
During the same period, the daily hot metal output among these sampled steelmakers also fell 10,400 tonnes/day or 0.46% on week to 2.24 million t/d, while their operational rates averaged 75.63%, losing 0.74 percentage point on week, the survey showed.
More mills turned off their blast furnaces to conduct routine maintenance this week. Meanwhile, the retreat in finished steel prices further squeezed BF mills’ profit margins, pressing some to rein in production to cut losses, Mysteel Global learned.
For example, China’s national price of HRB400E 20mm dia rebar under Mysteel’s assessment settled at Yuan 4,022/tonne ($566/t) including the 13% VAT on February 22, lower by Yuan 20/t on week. As of the same day, only around 25% of the 247 steelmakers were able to earn some profits on steel sales, Mysteel’s other survey found.
As a result, daily consumption of imported iron ore among these sampled 247 steel mills dipped 10,800 t/d on week to average 2.74 million t/d over February 16-22, after rising continuously during the previous six straight weeks, according to Mysteel’s tracking.
Also, these mills saw their iron ore inventories continue to decline because they were hesitant to replenish the feed materials under the pressure of negative steel margins, Mysteel Global learned.
As of February 22, total inventories of imported iron ore held by the same 247 steelmakers under Mysteel’s tracking had decreased for the second straight week by another 375,100 tonnes on week to 95.3 million tonnes. The stocks would be sufficient to last these mills for 34.7 days at their present consumption rate, unchanged from the previous period, according to Mysteel’s assessment.
Source: Mysteel
