WEEKLY: China's BF capacity use dips further to 83.34%

During the survey period, the daily hot metal output among these sampled steel mills also retreated by 6,600 tonnes/day or 0.3% percentage point on week to 2.23 million t/d, while their operational rates averaged 75.19%, lower by 0.44 percentage point on week, the survey showed.

Some mills in North and South China turned off their furnaces to conduct routine maintenance on the facilities, Mysteel Global learned.

Accordingly, daily consumption of iron ore among the 247 steel mills also decreased for the second consecutive week by another 8,500 t/d on week to 2.7 million t/d over the same period, according to Mysteel's tracking.

Recently, domestic BF mills' replenishment demand for feed materials remains lacklustre even though the iron ore prices in China have trended down somewhat, given the still-slack steel demand during the two weeks post the Chinese New Year holiday, market sources observed.

As a result, the total inventories of imported iron ore held by the sampled steelmakers kept falling for the third straight week to 93.3 million tonnes as of February 29, down by 2 million tonnes or 2.1% on week, Mysteel tracking showed.

On the other hand, the reduction in iron ore prices saw profit margins among steelmakers to improve overall, Mysteel Global noted.

As of February 29, for example, Mysteel PORTDEX 62% Australian Fines in Qingdao settled at Yuan 921/wmt ($129.6/wmt) FOT and including the 13% VAT, lower by Yuan 22/wmt on week. By the same day, around 27% of the 247 steelmakers were able to earn some profits on steel sales, climbing 2 percentage points from the prior week, Mysteel's survey showed.

Written by Anthea Shi, shihui@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com