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[SMM analysis] the operating rate of blast furnace has dropped for three consecutive weeks, and the market has gradually accumulated the kinetic energy of rebound.
Jul 2,2020 08:38CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

According to a survey by SMM, the operating rate of blast furnace in the first week of July was 90.16%, down 0.13% from last week. It is expected that the operating rate will remain stable next week.

According to the SMM cost model, in the week from June 24 to July 1, the average profit of the long process steel plant was 125 yuan / ton, which was about 60 yuan / ton lower than that of the previous week. Under the double pressure of rising steel plant costs and falling steel prices, steel mill profits continued to be compressed. Under the condition of poor profits, some steel mills in North and Central China carried out routine annual inspection of blast furnaces, driving the operating rate of blast furnaces to continue to decline slightly.

After the Dragon Boat Festival, fears of a second outbreak of the overseas epidemic intensified, and the domestic epidemic also appeared a trend of local small-scale spread. Anxin County, Xiongan New District, began to implement fully closed management of villages, residential areas, and buildings, coupled with floods in many places, and steel stocks changed from falling to increasing, and the market mentality turned to cautious wait-and-see. However, SMM believes that in July, the shortage of funds has improved, and the pressure on the supply side of steel mills has also shown signs of alleviation. according to the latest research by SMM, as of June 30, the operating rate of 34 independent electric arc furnace steel mills was 77.73%, down 4.24% from last week. The epidemic in Beijing is also expected to be well controlled in the near future, and demand release is still expected after the rainy season, after the release of pessimism. The market is expected to usher in a new round of rebound.

Fig. 1 the operating rate of blast furnace has dropped slightly for three consecutive weeks

Source: SMM Steel

      

Specific research feedback:

Steel plant A (East China): the rolling line will be overhauled in mid-July, but there is no maintenance plan for the blast furnace at present. The profit of threaded steel per ton is 300 yuan.

Steel mill B (South China): at present, the thread shipment is not very good, the inventory is very large, and it is not very optimistic about the future market.

Steel mill C (Huazhong): the blast furnace is normally produced, but the hot metal changes from thread to hot coil, mainly because the thread profit has dropped a lot. At present, the thread net profit is more than 100 pieces, and the hot coil has more than 200.

Steel plant D (southwest): the blast furnace is normal now, and there is no maintenance plan in the later stage.

Steel plant E (North China): a regular annual inspection is carried out this month, and one of its 4000m3 blast furnaces is planned to be shut down for maintenance, while its rolling line is overhauled for nearly a month in turn.

Steel plant F (southwest): the overhaul ended last week and is now in normal production. Now the factory pool is slowly increasing, the downstream demand is general, profits are compressed, the mentality is more pessimistic.

 

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