Steel News Update

SHANGHAI, Feb 8 (SMM) — This is a roundup of news in the steel industry chain in China last week. 

Chongqing Iron & Steel brought its No. 3 blast furnace back online

Chongqing Iron & Steel resumed production on its No. 3 blast furnace on February 2, marking the completion of its blast furnace system upgrade and transformation project. Its four blast furnaces are running at full capacity at the same time. The No. 3 blast furnace closed on December 6, 2020 for upgrading, and currently has a daily capacity of more than 7,000 mt of pig iron. 

Chongqing Iron & Steel produced about 6.3 million mt of pig iron in 2020. With the four blast furnaces at full capacity, pig iron output of Chongqing Iron and Steel is expected to exceed 7 million mt in 2021. The company produced 656,000 mt of pig iron in January. 

Baowu to expand and take over Kunming Iron & Steel

Steel giant China Baowu Group will take over Kunming Iron & Steel, which has a crude steel capacity of 7.9 million mt.

Following the consolidation of Baosteel and Wuhan Iron & Steel, Baowu has acquired steel mills across China, such as Masteel Group, Taiyuan Iron & Steel and Chongqing Iron & Steel. It is also managing Sinosteel, integrating steel companies in Xinjiang and joining Guangdong Province in establishing China Baowu Zhongnan Steel. 

After completing the acquisition of Kunming Iron & Steel, Baowu's capacity is expected to reach 160 million mt.

Operating rates of blast furnaces across Chinese steelmakers at 86.3%, EAF mills operating rates at 23.94%, operating rates of outsourcing billets mills at 31.43%

Operating rates of blast furnaces at steel mills dropped 0.6 percentage point from a week ago but up 2.3percentage points from a year ago to 86.3% as of February 4, SMM survey showed. The enterprises in the initiative areas of Shaanxi-Jinchuan-Gansu Forum organised maintenance amid the approaching CNY holidays, which led to a further drop in the operating rates of blast furnaces.

Operating rates across 34 EAF mills of construction steel in China stood at 23.94% as of February 3, a drop of 47.64 percentage points from the previous week. The operating rates is expected to keep dropping slightly this week and rise significantly in late February and early March.

As of February 4, operating rates of outsourcing billet steel mills stood at 31.43%, a decrease of 29.5 percentage points from the 60.93% in January. The outsourcing mills have gradually ceased production for CNY holidays.

Railway freight volume hit 324 million mt in January, thermal coal freight volume at 120 million mt

In January, China’s national railway freight volume hit a new record high at 324 million mt, an increase of 34.1 million mt or 11.8% year on year, and the average daily loading was 173,000 vehicles, an increase of 19,400 vehicles or 12.7% year on year. Among them, the freight volume of thermal coal increased significantly to 120 million mt, a year-on-year increase of 23%.

DCE adjusted the price limit and margin level of iron ore futures contracts

DCE announced that starting from the settlement on February 9, the price limit for iron ore futures contracts will be adjusted to 11%, the margin level for hedging transactions will be adjusted to 11%, and the margin level for speculative transactions will remain at 12% (15% for I2105).

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