China’s output of pig iron increased 7.5% to 72.02 million mt in April from a month ago, to generate a year-over-year decline of 1.2%, according to data from the National Bureau of Statistics (NBS) released on Friday.

SMM data showed that HRC stocks across social warehouses and steelmakers decreased 4.17% in the week ended May 14 to 4.26 million mt, marking the ninth straight weekly decline.

Chinese electric arc furnace (EAF) steelmakers operating rates continued to edge higher as of early May, driven by the resumption of producers in central China as the spread of the coronavirus has stalled. However, the rally in operations will be constrained due to a surge in feedstock steel scrap prices. 

Data published by the industry body on Tuesday showed that social inventories of hot- and cold-rolled plates/coils, heavy & medium plates, wire rods and rebar in 20 Chinese cities stood at 16.24 million mt as of the end of April, down 930,000 mt, or 5.4% from April 20.

Hebei Jinxi Iron & Steel plans to put a 2,000m³ blast furnace into operation at the end of May, SMM learned.

The global widespread of COVID-19 has forced many countries to enforce stringent containment measures which result in a heavy impact on global economic activity. Over the past two months, we saw serious disruption of manpower, transportation and production in China. We are now seeing these scenarios happening around the world. 

Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China fell for a third straight this week, as demand from north China was strong. SMM data showed that HRC stocks across social warehouses and steelmakers decreased 2.2% in the week ended April 2 to 5.45 million mt, 73.62% higher than the same period after the Lunar New Year holiday last year. The stocks fell 1.38% in the prior week.

With measures to contain the fast-spreading coronavirus pandemic slowing business activity outside China and jeopardising demand for steel, steel billet prices in some countries are seeing sizable discounts against Chinese prices, boosting flows to China. Southeast Asian billet is currently offered at $405-410/mt, tax included, in China, while resources from producers in Jiangsu, East China, will cost about $462/mt. That creates a price gap of nearly 300 yuan/mt. Billet from Russia is around $35/mt cheaper than those from Southeast Asia in terms of FOB prices.  

Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China fell this week, marking the first week-on-week decrease since the Lunar New Year holiday, as demand recovered and mills were still undergoing maintenance. SMM data showed that HRC stocks across social warehouses and steelmakers decreased 2.28% from a week ago to 5.65 million mt as of Thursday March 19.

According to the SMM survey that covers 102 blast furnace steel mills, 42.2% of them are undertaking maintenance or have trimmed output (excluding mills that reduced output by adjusting rates of equipment utilisation and raw material ratios), down from a ratio of 50% last week, as some long steel mills have recovered production from maintenance.