Posted on 11 Oct 2024
Production enthusiasm among Chinese blast furnace (BF) steelmakers continued growing this week as the recent rises in steel prices led to a clear improvement in mills' profitability, while steel demand from end-users also showed a marked recovery, Mysteel's latest survey showed.
During October 4-10, the BF capacity utilization rate among the 247 steel producers under Mysteel's regular tracking climbed for the sixth consecutive week to reach 87.51%, higher by 1.9 percentage points from the previous week.
The operational rates among these sampled mills averaged 80.79% during the same period, also gaining 1.22 percentage points from one week before. Accordingly, their daily hot metal output increased by 2.2% on week to 2.33 million tonnes/day, the survey showed.
Steelmakers across the country were actively bringing their idled furnaces back online after observing the rally of steel prices recently, Mysteel Global learned. As of October 10, for example, China's national spot price for HRB400E 20mm diameter rebar was assessed by Mysteel at Yuan 3,891/tonne ($549.6/t) including the 13% VAT, hovering around a seven-month high.
By the same day, around 71% of the 247 BF mills under Mysteel's tracking could earn profits on steel sales, leaping by 52 percentage points from a week earlier and hitting the highest level since April 2022.
In addition to their improved profitability, the recovery in steel consumption by downstream users also encouraged domestic steelmakers to ramp up production, Mysteel's other survey showed.
China's total consumption of the five major carbon steel products - rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate - increased by a significant 10.7% on week to reach 8.9 million tonnes over October 4-10, according to Mysteel's tracking.
As a result, the daily consumption of imported iron ore by the 247 BF mills Mysteel monitors went up by 1.9% from the prior week to reach 2.9 million t/d during October 4-10. The mills have sped up their replenishment of iron ore to meet their growing production demand, Mysteel Global learned.
By October 10, the total inventories of imported iron ore in all forms held by the same 247 BF mills mounted to 89.9 million tonnes, higher by 3 million tonnes or 3.5% on week. The stocks would be sufficient to last them for 31.2 days at their current usage rate, longer by 0.5 day than the previous period, Mysteel assessed.
Source:Mysteel Global
