Posted on 06 Dec 2021
Over November 26-December 2, the blast furnace (BF) capacity utilization rate among China's 247 steel mills under Mysteel's survey eased for the seventh straight week by another 0.43 percentage point to 74.8%, or still hovering at the lowest since March 2018, suggesting that Chinese steel mills had been curtailing their output amid the series of restrictive measures and tepid steel demand in winter.
During the survey period, these mills' daily molten iron output eased accordingly by 11,700 tonnes/day on week to 2.01 million t/d in total, while the operational rate of the blast furnaces at the surveyed mills recovered from two weeks of declines, albeit by a tiny 0.14 percentage point on week to 69.79%, according to Mysteel's survey.
"Steelmakers in East China's Shandong province, for example, had been trimming their output further to fulfill Beijing's requirement on lower crude steel output on year for 2021," a Shanghai-based market watcher commented.
Besides, some obsolete and low-efficiency blast furnaces in North China's Hebei province have been permanently shut during the period as part of the old-for-new capacity swaps, though "another 12 blast furnaces, many being smaller in size in the northern part of the country, have resumed operations after the maintenance, thus operational rates are higher", she added.
Winter months are usually low steel consumption season in China especially in North China due to the low temperatures, and Chinese steel mills tend to maintain low output in normal years accordingly, Mysteel Global understands.
By December 2, inventories of imported iron ore at the 247 steel mills in all forms including the volumes at steelworks, port stockyards and on the water, decreased for the fourth week by 2.08 million tonnes on week to 104 million tonnes, as Chinese steel mills, on lower steel output and closer to the yearend, had still acted cautiously by maintaining low in-house iron ore stocks, and the volume will be sufficient for around 41.61 days of consumption, or 0.54 day shorter on week but still higher than four days more than the same period last year.
Over the same survey period, Mysteel's smaller-scale study on China's 163 steel plants showed that their blast furnace capacity utilization rate decreased for the second week by another 0.55 percentage point on week to 57.47% as of December 2.
Source:Mysteel Global
