Posted on 18 Jul 2022
Over July 8-14, the blast furnace (BF) capacity utilization rate among China's 247 steel mills under Mysteel's survey had dropped for the fourth straight week by another 1.7 percentage points on week to 84.01% as of July 14, as most mills had been cautious with their steel output amid thinning margins or even losses, together with pent-up demand from end-users.
Over the latest survey period, daily molten iron output among these 247 mills, thus, dipped by 45,800 tonnes/day on week to 2.26 million t/d in total, and their BF operational rate also declined by 1.55 percentage points on week to 76.98%, or 6.9 percentage points lower on year, indicating more had been on maintenance.
Chinese steel producers continued to rein in output this week after noting weak downstream demand for steel during the summer off-season when many regions of China are experiencing record-high temperatures, Mysteel Global noted.
Moreover, "the resurgence of COVID-19 cases in some regions also added uncertainties to Chinese steel market and aggravated the negative sentiment, leading to a further decline in steel prices," a Shanghai-based market watcher commented.
As of July 14, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment fell Yuan 210/tonne ($31.1/t) on week to Yuan 4,012/t and including the 13% VAT, or the lowest since November 9 2020.
And over July 8-14, spot trading of construction steel among China's 237 trading houses under Mysteel's survey decreased by 11.4% on week to hover at a relatively low level of 136,144 t/d.
In tandem, a total of 14 blast furnaces were idled during the survey period. And Mysteel's other survey on these 247 steel mills showed that only 13.85% were making profits as of Thursday, 3.03 percentage points lower on week or 68.83 percentage points lower on year.
Subsequently, lower steel output saw the daily consumption of imported iron ore among the 247 surveyed mills decrease by 53,700 t/d on week to 2.75 million t/d on average over July 8-14.
Lower steel output also led these mills to reduce their imported iron ore inventories, as the total volume including all forms and the tonnage at their steelworks, port stockyards and on the water, dipped by another 3.78 million tonnes to 101.1 million tonnes, though it could still last 36.8 days of use, or 0.65 day shorter than the previous survey period.
Source:Mysteel Global
