Posted on 29 Jul 2024
Blast furnace (BF) production among Chinese steelmakers still hovered at a relatively high level during this week, even though the mills' profit margins shrank drastically with falling steel prices, Mysteel's survey showed.
During July 19-25, the average BF capacity utilization rate among the 247 steel producers under Mysteel's regular tracking was largely unchanged on week at 89.61%, or dipping 0.01 percentage point, and their hot metal output retreated by a marginal 0.02% on week to 2.4 million tonnes/day.
Over the same period, operational rates of these sampled mills averaged 82.33%, lower by 0.3% percentage points from the previous week, the survey showed.
A few smaller-sized furnaces were blown off for maintenance this week, leading to the decrease in the hot metal production overall, Mysteel Global learned.
Meanwhile, the fast drops in domestic steel prices dragged more BF mills into negative margins, which may further dampen their enthusiasm for production, Mysteel's survey suggests.
By Thursday, for example, the country's national spot price of HRB400E 20mm diameter rebar was assessed by Mysteel at Yuan 3,422/tonne ($473.2/t) including the 13% VAT, lower by 4.4% on week.
On the same day, only around 15% of the 247 BF steelmakers under Mysteel's tracking could earn some profits on steel sales, down by a marked 17 percentage points from the prior week.
Although the hot metal production stopped rising this week, steelmakers' demand for imported iron ore did not retreat, the survey showed, as the daily consumption of imported iron ore among the sampled 247 steel mills edged up 0.2% on week to reach 2.94 million t/d during July 19-25.
Compared with domestic iron ore concentrates, imported iron ore products proved more cost-effective for Chinese steelmakers as their prices dropped more rapidly, market sources observed.
By July 25, the total inventories of imported iron ore held by the same 247 steelmakers in all forms dipped 0.3% on week to 92 million tonnes, which would be sufficient to last them for 31.3 days at their current usage rate, shorter by 0.2 day from the previous period, according to Mysteel's assessment.
Source:Mysteel Global
