Posted on 13 Dec 2022
The blast furnace (BF) capacity utilization rate among 247 Chinese steel mills under Mysteel's survey dipped by 0.61 percentage point on week to reach 82% over December 2-8, a new low since mid-August, as most mills had been cautious about steel production amid their thinning margins and tepid demand in winter.
During the latest survey period, daily hot metal output among these 247 mills, thus, decreased by 16,500 tonnes/day on week to 2.21 million t/d in total, while their BF operational rate nudged up by 0.29 percentage point on week to 75.89% as of December 8.
Winter is usually a low steel consumption season in China especially in North China due to low temperatures, and Chinese steel mills tend to maintain low output in winter months accordingly, Mysteel Global understands.
Tepid downstream demand for finished steel and persistent thinning profit margins have dampened some steelmakers' enthusiasm in higher output, according to a Shanghai-based market watcher.
In tandem, the spot trading of construction steel among 237 Chinese trading houses under Mysteel's survey stayed tepid over December 2-8, averaging at a low level of 140,848 t/d.
By December 8, Mysteel's other survey showed that only 22.51% of the same 247 mills were making profits as of Thursday, 1.3 percentage points lower on week or 57.14 percentage points lower than the same period last year.
However, "some BFs, most being smaller in size, have resumed operations after maintenance works, thus the overall operational rate is higher," she added.
During the survey week, the daily consumption of imported iron ore among the 247 mills edged down accordingly by 23,600 t/d on week to 2.74 million t/d on average.
As of December 8, the total inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water held by these surveyed mills increased by 335,600 tonnes on week to 91.82 million tonnes, which could last for 33.46 days of use, or 0.41 day longer than the prior week.
Source:Mysteel Global
