Operating rates of blast furnaces across Chinese steelmakers rose 0.2 percentage point on week

SHANGHAI, May 14 (SMM) — Operating rates of blast furnaces at steel mills rose 0.2 percentage point from a week ago and increased 2.3 percentage points from a month ago to 86.8% as of May 14, SMM survey showed. Under the stimulus of high profits, steel mills outside the restricted production area was enthusiastic about production since the beginning of this week, and operating rates of blast furnaces across Chinese steelmakers continued to rise compared with last week.

The national policy on carbon peak and carbon neutrality has been continuously strengthened after the holiday. President Xi said that high energy-consuming and high-emission projects that did not meet the requirements should be resolutely taken down. After that, the National Development and Reform Commission issued a notice requesting local governments. The government should complete the self-inspection of steel projects and annual production reduction tasks before mid-May. On-site inspections will be conducted from June to July. This move is considered to be a prelude to further restrictions on crude steel output. At the same time, the delayed release on the demand side drives the spot with a sharp increase, futures were also driven by the surging spot prices. Several metals had their daily limit, while the risk was gradually accumulating. Under the impact of factors such as the sharp rise of the US dollar, the drop of stock markets, the lower than expected social financial data, and the Prime Minister’s propaganda that commodities were rising too fast, the market was about to decline. In fact, in addition to the macro and news factors, the fundamentals also experienced the weakening of the margin, on the one hand, domestic consumption declined, on the other hand, exports in May will likely fall after the overdraft in April. In addition, the rainy season is approaching. It is not ruled out that steel stocks will pile up when the margin of consumption weakened and output did not fall significantly. At present, the downstream acceptance of steel prices is close to the warning line, and there is a need for a price correction in the near term. However, under the expectation of reducing crude steel production, the extent of the correction of steel prices need not be overly pessimistic.

Operating rates of blast furnaces at Chinese steelmakers