Operating rates at blast furnaces to rebound in Sep as production recovers

SHANGHAI, Sep 13 (SMM) – Operating rates at blast furnaces across China are likely to rebound this month as steel mills recover from output curbs or maintenance, SMM expects.

The average operating rate across 486 blast furnaces in 110 mills, with volume totaling 637,577 m³, came in at 85.85% in August, down 0.53 percentage point from July and is expected to rebound 0.28 percentage point to 86.13% in September.

In August, production curbs in the non-heating season continued in Tangshan, Handan and Wu’an in Hebei province. Some mills in Shanxi, Shaanxi, Henan and Jiangxi provinces faced curbs in the middle of August. But these limitations had little impact on actual output as mills turned to higher grades of ore or used more scrap.  

Some blast furnaces in north-east, east and central China resumed last month after maintenance ended. This also offset the impact of production curbs. Crude steel supplies did not significantly decrease in August.

SMM learned that most mills outside the centre of Tangshan have recovered production. The city environmental protection bureau rebuked 14 mills for resuming capacity without approval after the summer restrictions ended on August 31, but have yet to impose penalties. Authorities are likely to ease environmental restrictions in September.

SMM expects overall output to grow in September from August as mills are encouraged by high profit margins. Steel prices are likely to hover around highs in the short term given current robust demand.