Utilization of China’s domain capacity increased to a 7-month high

Blast furnace capacity utilization among 247 Chinese steelmakers averaged 89.53% on June 17-13, up 1.39 percentage points from the previous week. This figure was the highest since November last year, according to Mysteel.

Pig iron production at these enterprises averaged 2.39 million tons per day, up 1.51% from the previous week.

According to Mysteel Global, the growth in pig iron production was mainly driven by plants in Hebei, Shanxi, Liaoning, Shandong and Guangxi provinces as local steel mills returned blast furnaces to operation after maintenance shutdowns.

Daily consumption of imported iron ore at 247 steel mills increased by 1.7% y/y – to 2.93 million tons per day on June 7-23. According to market sources, as production needs expanded, mills slightly increased purchases of this raw material from traders.

As of June 13, the total stocks of imported iron ore at these plants increased by 317.1 thousand tons compared to the previous week, to 92.5 million tons, which will be enough for 31.6 days at the current level of utilization.

At the same time, the profitability of steelmakers deteriorated as steel prices remained on a steep downward trend.

In January-May 2024, Chinese steel companies reduced steel production by 1.4% compared to the same period in 2023, to 438.61 million tons. In May, the country increased this figure by 8.1% m/m and 2.7% y/y – to 92.86 million tons. The May production is the highest monthly figure since March 2023.