Utilization of China’s blast furnace capacities increased despite low steelmakers’ profits

Blast furnace capacity utilization among 247 Chinese steelmakers averaged 88.57% on May 10-16, up 0.9 percentage points from the previous week, according to Mysteel.

Pig iron production at these plants during the period increased by 23.9 thousand tons per day, or 1% compared to the previous week, to 2.37 million tons per day.

According to Mysteel Global, the total capacity of the furnaces that returned to operation after the maintenance shutdown on May 10-16 was higher than that of the ones that were suspended. The increase in production was mainly driven by plants in Hebei Province.

Despite the increase in production, steel mills remained cautious about purchasing raw materials. Their profits, market sources said, remained low amid a steady decline in domestic steel prices last week.

About 52% of the 247 mills in the May 10-16 sample were able to make a profit from selling steel products, a figure that remained unchanged from the previous week.

The daily consumption of imported iron ore at 247 steel mills in the period amounted to 2.89 million tons per day. However, the total stocks of imported raw materials decreased slightly by 0.6% week-on-week – to 92.7 million tonnes as of May 16, which would be enough for 32 days at the current level of consumption.

As GMK Center reported earlier, in January-April 2024, Chinese steel companies reduced steel production by 3% compared to the same period in 2023, to 343.67 million tons. In April, this figure fell by 2.6% compared to the previous month and by 7.2% compared to April 2023 – to 85.94 million tons.