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WEEKLY: China blast furnace capacity use dips 3rd week

The blast furnace capacity utilization rate among China’s 247 steel mills dipped for the third week by November 13-19, nudging down another 0.47 percentage point on week to 91.64% on average, according to Mysteel’s weekly survey, indicating that many of the surveyed mills had been just finetuning their steel output on the solid demand so far.

The furnace utilization rate was still 7.08 percentage point higher on year after three weeks of drops, and these mills’ average daily molten iron output inched down by another 12,600 tonne/day on week to 2.44 million t/d over the survey period, while the operational rate of their blast furnaces reversed up by 0.13 percentage point on week to 86.46% indicating that the number of blast furnaces under operation had remained largely unchanged.

“Currently, Chinese steelmakers have been producing as per normal,” a Shanghai-based market analyst commented, and “they are still optimistic about the steel demand in the near term.”

Over November 13-19, the spot trading volume of rebar, wire rod and bar-in-coil among the 237 trading houses across China averaged 228,500 t/d, down 3.4% on week, according to Mysteel’s daily tracking, which was still considered rather robust as being above the threshold of 200,000 t/d especially in November when China has been in the early winter, Mysteel Global noted.

Solid demand saw China’s national price of HRB 400 20mm dia rebar, a bellwether of the domestic steel-market sentiment, increased by another Yuan 39/tonne ($5.9/t) on week to Yuan 4,159/t including the 13% VAT as of November 19, according to Mysteel’s assessment.

Inventories of the five major carbon-steel items including rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at the trading houses in 132 cities, thus, decreased for the sixth week to 15.9 million tonnes as of November 19, or down 6.6% on week, Mysteel’s data showed.

The remaining high steel output led to higher inventories of imported iron ore at the 247 Chinese steelmakers including all forms and the volumes at the plant, port stockyards, and on the water, increased by 1.9 million tonnes on week to 112.5 million tonnes, which would be sufficient for 37.3 days at the present daily consumption rate, or 0.81 day longer on week, Mysteel noted.

Over the same survey period, Mysteel’s smaller-scale study among the 163 blast-furnace steel plants across China showed that their BF capacity utilization remained largely stable at 77.43% as of November 19, down a tiny 0.02 percentage point on week. The results include those furnaces that have been long idled for various reasons.

Written by Lindsey Liu, liulingxian@mysteel.com

Edited by Hongmei Li, li.hongmei@mysteel.com