Posted on 02 Dec 2024
After experiencing mild increases this month, daily hot metal production among the 247 Chinese blast-furnace (BF) steelmakers Mysteel regularly tracks is predicted to decline to an average of 2.33 million tonnes/day in December, as tepid steel consumption is seen sapping the mills' keenness for producing, Mysteel's latest report argues.
During November, 14 BFs at the sampled mills – mainly those hosted by makers in North and East China – resumed operations after routine maintenance, the survey results showed. However, from mid-month many mills had started to rein in their production, culminating in a total of 21 BFs being taken offline during the month.
As a result, hot metal output of the 247 sampled steelmakers averaged 2.35 million t/d over November 1-28, rising by a mere 0.2% from October's average, Mysteel's tracking showed.
The rise in steelmakers' hot metal production last month was much smaller than had been expected, the lower result being attributed to a failure of steel prices to sustain their momentum after Beijing's economic stimulus policies were poorly received, the report explained. This caused more mills to slip into losses.
Indeed, a growing number of mills have been reporting losses since late October. For example, about 48% of these 247 mills said they were losing money on finished steel sales when questioned on November 28, higher than the 39% ratio recorded a month earlier.
Meanwhile, December is usually a weak month for steel demand in China as cold weather slows construction activity, so seasonal declines in hot metal output are expected. Moreover, Mysteel's other survey sampling over 100 companies including traders and steelmakers across the country found that Chinese mills are less willing to build their winter stocks this year, with only 37% of surveyed mills expressing plans to do so, as reported.
Generally, 12 blast furnaces with a total pig iron capacity of 62,000 t/d are scheduled to be taken offline for overhauls next month. In contrast, only two BFs are expected to restart, bringing back just 17,500 t/d of productive capacity, Mysteel's survey results showed.
In addition, the report also warned that daily hot metal output among the sampled steelmakers in December could slip below 2.3 million t/d if their profitability continues to worsen. The same could happen if the Politburo meeting and the Central Economic Work Conference both scheduled for December fail to boost market confidence, it noted.
Source:Mysteel Global