SHANGHAI, Jul 15 (SMM) — Operating rates of blast furnaces at steel mills fell 0.6 percentage point from a week ago and decreased 4.4 percentage points from a month ago to 81.4% as of July 15, SMM survey showed. Production reductions have been strictly implemented in many places across the country, and the scope of reductions has continued to expand. Operating rates of blast furnaces continued to decline, which strengthened the expectation of production reductions in the second half of the year. The output data for July also reflected the effect of the reduction.
The People's Bank of China decided to lower the deposit reserve ratio of financial institutions by 0.5 percentage point on July 15, 2021. The RRR cut is to hedge the impact of rising commodity prices on the production and operation of enterprises, not to further push up commodity prices. The expected production restriction is still the dominant logic. As the economy continues to recover, the overall supply and demand situation is steadily improving.
Stimulated by rising futures and rising prices by mainstream steel mills this week, the spot market quotations generally rose, and the macroeconomic benefits and the improvement of supply and demand expectations promoted the strong operation of steel prices. The current downstream demand was still in the off-season, while steel mills actively cut production due to losses and the impact of national production control policies. Production recovery was slow, and steel supply and demand showed a marginal improvement. Moreover, as the production control policy is gradually fulfilled and the central bank’s RRR cut is positive, steel prices are expected to keep trading strongly.
Operating rates of blast furnaces at Chinese steelmakers
