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

SHANGHAI, Jul 8 (SMM) - Operating rates of blast furnaces at steel mills dropped 0.2 percentage point from a week ago and 5.2 percentage points from a month ago to 82% as of July 8, SMM survey showed.

Many places across China strictly implemented production reductions, as crude steel production must not exceed the volume last year. This led to a continued decline in blast furnace operating rates. The production reduction in the off-peak season can offset part of the impact of price increases.

Most of the steel companies in Tangshan, excluding those have completed ultra-low emission targets, have resumed production of blast furnaces on July 2, and began to cut production by 30% from July 2 to December 31. All these blast furnaces are effectively resuming production in accordance with their respective production paces.

In addition, most steel plants in Shanxi have resumed production in the early morning of July 2.

Tangshan has made adjustments to its production restriction policy. Due to the expected reduction in 2021 steel production and the year-on-year increase in the H1 output, the steel output in H2 is expected to decrease.

In this context, a total of 61.35 million mt of output will be reduced from June to December.

In H2 2021, the alleviation of the chip shortage may promote the recovery of auto companies' output, thereby driving up the demand for raw materials.

Raw material prices have upward room amid lower steel output and higher demand, and the steel industry development is positive.