Posted on 02 Dec 2024
Chinese blast furnace (BF) steelmakers' enthusiasm for production cooled further this week, as the country's domestic steel prices continued to weaken while downstream steel demand retreated as well, according to Mysteel's latest survey.
Mysteel's regular tracking among the 247 BF steelmakers showed their average capacity utilization rate lost 0.73 percentage points on week to reach 87.8% during November 22-28, with their daily hot metal production falling 0.8% from the prior week to 2.34 million tonnes/day.
During the same period, the operational rates among these sampled mills averaged 81.62%, lower by 0.31 percentage point on week, the survey showed.
As Chinese steel prices kept heading south, more domestic mills started to lose money on selling their steel products, which dented their production enthusiasm, Mysteel Global noted.
As of November 28, for example, China's national spot price for HRB400E 20mm diameter rebar was assessed by Mysteel at Yuan 3,430/tonne ($474.3/t) including the 13% VAT, falling Yuan 30/t or 0.9% on week.
By the same day, only around 52% of the 247 steel mills Mysteel tracks could make some profits on steel sales, lower by 3 percentage points from a week earlier.
Moreover, steel demand was shrinking gradually, especially in the northern regions of the country, where steel end-users such as building contractors generally reduced their working hours due to the severe cold in winter, Mysteel Global learned. Observing the waning demand, local steel producers reined in production as well, Mysteel's survey showed.
Consequently, the daily consumption of imported iron ore among the 247 mills under Mysteel's tracking decreased by 1% on week to 2.9 million t/d during November 22-28.
The reduced consumption led to an accumulation of iron ore stocks at these steelmakers, with the total inventories of imported iron ore in all forms rising 1.1 million tonnes or 1.2% on week to reach 92.9 million tonnes as of November 28, according to the survey.
The existing stocks would be sufficient to last these surveyed mills for 32 days at their current usage rate, longer by 0.7 day from the previous period, Mysteel assessed.
Source:Mysteel Global
