WEEKLY: China's BF capacity use rises further to 83.8%

The blast furnace (BF) capacity utilization rate among the 247 Chinese steel producers under Mysteel's regular tracking increased for the fifth straight week during February 2-8 to reach 83.8%, up by 0.23 percentage point on week, with domestic steelmakers continuing to restart production after maintenance stoppages.

During the latest survey period, daily hot metal output among these sampled steelmakers also increased by 6,000 tonnes/day or 0.27% on week to reach 2.24 million t/d, while the mills' operational rate averaged 76.67%, up by 0.15 percentage point from the previous week.

More steelmakers in China have now brought their idled blast furnaces back onstream after completing annual overhauls in January, Mysteel Global noted.

Accordingly, daily average consumption of imported iron ore among the same 247 steelmakers under Mysteel's tracking had also increased for the fifth straight week, rising by another 20,900 t/d or 0.8% on week to average 2.75 million t/d during February 2-8.

However, compared with the same period in 2023, the growth in China's BF production was slower this week, market sources observed, blaming the negative margins among the mills and slack demand from steel users.

The domestic steel market has quietened before the eight-day Chinese New Year (CNY) holiday that officially starts this Saturday, Mysteel Global noted, so the BF steelmakers are less keen to ramp up production.

The spot trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 Chinese trading houses Mysteel regularly monitors had dropped to a four-year low of just 4,151 tonnes as of February 4, according to Mysteel's tracking.

On the other hand, steelmakers have not stopped replenishing iron ore during this week as they need to secure sufficient feed stocks to maintain their production during the CNY holiday when iron ore traders close their businesses, Mysteel's other survey showed.

As a result, by February 8, total inventories of imported iron ore held by the 247 sampled steelmakers had increased for the eighth straight week by another 881,600 tonnes or 0.8% on week to reach 109 million tonnes. The stocks would be sufficient to last the mills for 39.7 days at their present consumption rate, unchanged from the previous period, according to Mysteel's assessment.

Written by Anthea Shi, shihui@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com