Posted on 16 Dec 2024
Production among Chinese blast furnace (BF) steelmakers dipped further in the past few days and is likely to keep falling next week due to both government-mandated and voluntary maintenance stoppages among the mills, Mysteel's latest survey suggests.
The average capacity utilization rate of the 247 BF steel producers under Mysteel's regular tracking dropped for the fourth straight week, albeit by a small 0.05 percentage point, to reach 87.28% during December 6-12, and their daily hot metal production dipped 0.06% on week to 2.32 million tonnes/day.
Over the same period, the capacity utilization rate among these 247 mills also declined by 0.92% on week to 80.55%, the survey showed.
In the latest survey week, 5 blast furnaces restarted production after the maintenance works had been completed on them, but 11 furnaces were blown off across the country, according to the survey results.
Many steelmakers in North China's Hebei halted operations as required by local authorities to curb production in an effort to ease air pollution across the province, while some mills in North China's Shanxi and Northwest China's Xinjiang reduced output due to their thinning profit margins and weak demand from steel end-users, Mysteel Global learned.
By Thursday, only around 48% of the 247 steel mills under Mysteel's tracking could earn some profits on steel sales, lower by 2 percentage points from a week earlier.
"Those mills mostly started maintenance toward the end of this week, so the overall hot metal output was not much affected in the latest survey period," a market analyst based in Shanghai said. "The decrease in their production may be more evident next week," he believes.
Despite the falling output of hot metal, the daily consumption of imported iron ore among the 247 steel mills Mysteel monitors edged up by 0.1% on week to reach 2.9 million tonnes during December 6-12. Imported iron ore was more cost-effective compared with domestic ore and steel scrap this week, Mysteel Global noted.
Meanwhile, as steelmakers started to build up feed stocks for their production in winter, the total inventories of imported iron ore in all forms held by the same 247 mills grew for the fourth consecutive week to reach 94.3 million tonnes by December 12, higher by 0.6% on week, the survey showed.
The existing stocks would be sufficient to last the mills for 32.6 days at their current usage rate, longer by 0.2 day from the previous period, according to Mysteel's assessment.
Source:Mysteel Global
