BF operating rates at Chinese steelmakers fell for three weeks in a row

SHANGHAI, Sep 10 (SMM) — Operating rates of blast furnaces (BFs) at Chinese steelmakers fell for three consecutive weeks as environmental restrictions in Tangshan and lower profits drove steel mills to conduct maintenance.

An SMM survey showed that operating rates of BFs lost one percentage point on the week to 88.6% in the second week of September.    

Operating rates of blast furnaces at Chinese steelmakers

Steel prices entered a period of consolidation amid a slew of unfavourable news. Over last weekend, market talks came that the US was considering whether Semiconductor Manufacturing International Corporation (SMIC), China’s largest manufacturer of semiconductors, should be added to the Commerce Department’s entity list. Oil prices hit their lowest levels since June as fuel demand is expected to weaken after the US Labour Day holiday and coronavirus cases are likely to increase. Evergrande announced that from September 7 to October 8, all its real estates in China will be 30% off, covering at least 600 real estate projects, and this aroused concerns on prospects of the industry.

However, China’s major steelmaking city of Tangshan will conduct production restrictions during September 7-14, while demand is likely to improve amid optimism over consumption in automobile and machinery sectors and after virus-induced restrictions were lifted in northwest China. Steel prices are likely to rally after investors digest those negative news.

A steelmaker in north China has reduced production by about 20% since the start of this month on environmental protection concerns, shutting down four blast furnaces, while another steel mill in east China overhauled its BFs, converters and production lines of construction steel due to thin profits, according to the SMM survey.