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China BF capacity use at 88.55%, up for 2nd week

Posted on 20 July 2021

The blast furnace capacity utilization rate among China’s 247 steel mills under Mysteel’s regular survey inched up for the second week over July 9-15, rising by another 2.55 percentage points on week to 88.55%, as some steel mills in North and East China ramped up output after their steel margins improved.

 

Over the survey period, these 247 steel mills produced 2.36 million tonnes/day of molten iron on average, up 67,800 t/d on week.

The recent recovery in China’s finished steel prices allowed the domestic steelmakers' profit margins to improve, encouraging more mills to keep producing, the survey findings show.

For example, the national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 5,267/tonne ($816/t) including the 13% VAT as of July 15, up Yuan 177/t on week and hitting the highest since May 24. Consequently, the gross profits that the BF mills earned on rebar sales had recovered to Yuan 220/t, as against the previous week’s Yuan 28/t, according to Mysteel’s assessment.

On the other hand, the operational rate of their blast furnaces reversed down after a week increase, slipping by a small 1.56 percentage points on week to 76.69% during the latest survey period. 

“Over the past week, we did observe that some blast furnaces, especially some small-sized ones, had been idled for maintenance, so the dip in the overall operational rate is understandable,” a Shanghai-based analyst commented.

By July 15, the inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water held by these 247 mills had also edged up for the second week by another 534,200 tonnes on week to 114.8 million tonnes, Mysteel’s tracking showed. This would be sufficient for 39.59 days of consumption, lower by 1.17 days on week, as their daily consumption had increased too by 96,300 t/d on week to 2.9 million t/d on average. 

Over the same survey period, Mysteel’s smaller-scale study on 163 steel plants across China showed that their blast furnace capacity utilization rate showed a different trend, reversing down by 0.74 percentage point on week to 70.56%, Mysteel’s data show.

Source : Mysteel Global