WEEKLY: China's BF capacity use touches 11-month low

Accordingly, daily hot metal output among these sampled steelmakers decreased 53,600 tonnes/day or 2.4% on week to 2.21 million t/d during the same period, while their BF operational rates also lost 2.52 percentage points on week to average 75.19%, the survey showed.

The further strengthening of iron ore prices in China continued squeezing domestic steelmakers' profit margins, Mysteel Global noted. As of December 27, for example, Mysteel PORTDEX 62% Australian Fines in Qingdao reached Yuan 1,041/wmt ($147.6/t) FOT and including the 13% VAT, refreshing the highest level since early September 2021.

Consequently, among the 247 steelmakers under Mysteel's tracking, only 28.1% managed to earn some profits during December 22-28, lower by a marked 5.6 percentage points from the previous week.

On the other hand, steel trading in China's northern regions gradually cooled as local building contractors and factories shortened their outdoor working times due to the harsh winter cold, Mysteel Global learned, which also led steelmakers there to reduce output.

Over December 22-28, imported iron ore consumption among the sampled 247 steelmakers continued declining on mills' production cuts, Mysteel's survey showed, with their daily consumption dipping 69,200 t/d on week to 2.7 million t/d.

As of December 28, total inventories of imported iron ore held by these tracked mills increased to 95.3 million tonnes, higher by 369,800 tonnes from the previous week. The stocks would be sufficient to last 35.3 days of their use at present consumption rate, longer by 1 day than in the previous period, according to Mysteel's assessment.

Written by Anthea Shi, shihui@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com