The decrease in the indicator was mainly due to maintenance stops

According to Mysteel, the blast furnace capacity utilization rate among 247 Chinese steelmakers fell to 87.63% between November 24 and 20, 2023. This figure has been declining for five consecutive weeks.

This was mainly due to maintenance shutdowns at some plants in the north and east of the country.

As a result, daily pig iron production at 247 steel mills in the period decreased by 0.4% week-on-week to 2.34 million tons per day.

Three large blast furnaces were shut down for annual scheduled maintenance as the end of the year approached, but eight idle units were restarted after the work was completed.

According to Mysteel’s survey, daily consumption of imported iron ore among monitored steelmakers averaged 2.87 million tonnes per day on November 24-30, down 0.2% week-on-week due to a drop in production rates at the plants.

At the end of November, prices for finished steel products weakened, halting the upward trend in the profitability of Chinese steel mills that had been observed earlier.

The CISA believes that China’s steel industry should use capacity management as the main means of addressing the imbalance between supply and demand. At the same time, steel mills should switch to low-carbon production to ensure their long-term viability.

As GMK Center reported earlier, in October 2023, China’s steel companies reduced steel production by 3.7% y/y – to 79.09 million tons. Compared to October 2022, it fell by 1.8% in October 2023. Chinese steel production fell for the fourth consecutive month as more and more steel mills introduced maintenance amid declining profitability and unrealistic expectations of demand during the peak consumption season.