Operating rates of blast furnace at Chinese steelmakers dipped on week

SHANGHAI, Nov 5 (SMM)—Operating rates of blast furnace (BF) at Chinese steelmakers dipped on the week as several steel mills overhauled their BFs.

An SMM survey showed that the average operating rate of BFs at steel mills in China edged down 0.23 percentage point from the prior week to 88.51% as of November 5. This was down 0.3 percentage point from the same period last year.

Operating rates of blast furnace at Chinese steelmakers

Coke prices remained firm this week and registered a fresh high in 2020, as stocks at ports, steelmakers and coke plants all hovered at low levels and as the news of capacity cuts lingered. Market talks came on Tuesday that four coke plants in Shanxi Xiangning with total capacity of 2.4 million mt are expected to halt production from November 6, which will impose great impact on coke supply in Shaanxi, Shanxi Jinnan and Shandong. In addition, the sixth round of price increases has gradually been settled, with Rizhao Steel and HBIS accepting the higher prices, and the seventh round is also expected to occur in the near term. Furthermore, capacity elimination in Henan has been brought forward from 2021 to the end of this year, which has prompted investors to raise more bets on long positions. Against this backdrop, coke prices rose by more than 100 yuan/mt in a single day, leading the ferrous complex higher.

In the near term, steel supply is likely to fall as market talks came that steelmakers in Tangshan will again restrict production during November 4-6, while demand is stable at present, which are expected to further boost steel prices.