China’s domain capacity utilization falls for second week in a row

Steelmakers continue to reduce production volumes amid falling steel consumption

The domain capacity utilization rate of 247 Chinese steel producers on June 28 – July 4, 2024 averaged 89.08%, which is 0.05 percentage points less than in the previous week. This is evidenced by the data of Mysteel.

More and more steel plants are beginning to overhaul furnaces amid low demand in the country.

The average daily production of cast iron decreased by 1.2 thousand tons per day, reaching 2.39 million tons/day, slowing down compared to a drop of 5 thousand tons/day observed in the previous week.

According to market sources, metallurgists continued to reduce production volumes amid a decrease in steel consumption by end consumers.

Another Mysteel study showed that the level of total stocks of the five main types of carbon steel in the warehouses of Chinese traders increased for the fifth consecutive week, even though the total production of these types of products decreased overall.

In parallel with the decline in pig iron production, 247 metallurgical plants on June 28 – July 4 reduced the daily consumption of imported iron ore – to an average of 2.9 million tons per day. The fall in this indicator is also observed for the second week in a row.

As of July 4, the total reserves of imported iron ore at these enterprises increased by 727.8 thousand tons, or 0.8% per week and reached 92.1 million tons. This will be enough for 31.4 days at the current level of use.

Last week’s rebound in steel prices helped some steel mills regain profitability, so they replenished stocks of raw materials. By July 4, about 45% of the 247 steel producers were able to get some profit from the sale of metal products, which is about 2 percentage points higher than in the previous week.

As GMK Center reported earlier, Chinese steel companies in January-May 2024 reduced steel production by 1.4% compared to the same period in 2023 – to 438.61 million tons.