The indicator fell for the second consecutive week after the previous long increase
Blast furnace capacity utilization among 247 Chinese steel mills fell to 83.34% between February 23 and 29, according to Mysteel. Compared to the previous week, it lost 0.25 percentage points.
This is the second week in a row that the indicator has declined after a long previous period of growth. This is mainly due to plant shutdowns for maintenance.
During this period, daily pig iron production at 247 companies decreased by 0.3% compared to the previous week – to 2.23 million tons per day.
Some factories in North and South China have shut down their blast furnaces for scheduled facility maintenance.
Daily iron ore consumption among 247 steel mills also decreased for the second consecutive week, reaching 2.7 million tons per day between February 23 and 29.
According to Mysteel, demand for this raw material to replenish stocks at national steel mills has remained low recently, despite the slight drop in ore prices in China. This trend was driven by weak steel demand in the two weeks following the Chinese New Year holidays.
As a result, total stocks of imported iron ore in the warehouses of 247 steel mills continued to decline for the third consecutive month. At the end of February, there were 93.3 million tons, a drop of 2.1% in the weekly comparison. On the other hand, lower ore prices helped steelmakers improve their margins.
As Compraço previously reported, demand for iron ore in China is expected to be supported in the short term by the resumption of construction sites following the Lunar New Year holidays and the associated increase in steel consumption. The market expects a recovery in laminate consumption in the spring. For example, after the holidays, demand for rebar in North China increased slightly due to construction needs.
Furthermore, Chinese steel mills produced 1.019 billion tons of steel in 2023, an increase of 0.6% compared to 2022. This means that the downward trend in the country's steel industry has stopped after two consecutive years of declining production.
