Posted on 15 Jul 2024
Chinese blast furnace (BF) steelmakers further reined in production after seeing their profit margins shrink again, while the waning demand from steel end-users also undermined mills' producing activity, Mysteel's latest survey showed.
The average BF capacity utilization rate among the 247 steel producers under Mysteel's regular tracking had dropped for the third straight week by another 0.38 percentage point on week to reach 88.7% over July 5-11, and their hot metal production averaged 2.38 million tonnes/day, lower by 10,300 t/d or 0.43% over the same period.
During the survey period, the average operational rate among these sampled mills also lost 0.31 percentage point from the previous week to 82.5%, the survey showed.
The slide in finished steel prices dragged more BF steel mills into negative margins this week, leading to their increased maintenance stoppages, Mysteel Global noted.
By July 11, for example, China's national spot price of HRB400E 20mm diameter rebar was assessed by Mysteel at Yuan 3,598/tonne ($495.9/t) including the 13% VAT, losing 2.1% on week.
On the same day, only around 37% of the 247 steelmakers Mysteel tracks could earn some profits, lower by some 8 percentage points from a week earlier.
Meanwhile, during the first four working days of this week the spot trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel tracks averaged 118,559 t/d, lower by a large 14.7% from the same period last week, which indicated that domestic steel consumption was falling.
With more mills scaling back production, the daily consumption of imported iron ore among the 247 mills under Mysteel's monitoring also decreased for the third consecutive week to 2.92 million t/d during July 5-11, down by 16,000 t/d on week.
The slowdown of iron ore use resulted in the accumulation of iron ore inventories at their yards, with the total stocks of imported iron ore held by the same 247 steelmakers rising 1.1 million tonnes to reach 93.2 million tonnes as of July 11, which would be sufficient to last them for 32 days at their current usage rate, longer by 0.6 day from the previous period, Mysteel assessed.
Source:Mysteel Global
