Operating Rates of Blast Furnaces across Chinese Steelmakers Up 0.2% on Week

SHANGHAI, Aug 13 (SMM) — Operating rates of blast furnaces at Chinese steelmakers inched up this week and stabilized at low.

An SMM survey showed that the average operating rate of BFs at steel mills in China edged up 0.2% from the prior week and inched down 0.1% on the month to 81.3%, the first slight increase in two months, and basically stabilised at low.

In order to meet the national target of cutting down crude steel output, a number of measures were carried out including strict re-inspections on capacity cut to prevent resumed operation of overcapacity. The implementation is likely to intensify as the heating season approaches.

Currently, actual demand of steel is generally low with lacklustre transactions. While the demand has bottomed out entering August, the apparent consumption of rebar and HRC has rebounded accordingly. Steel demand from the mainstream downstream sectors also showed some resilience.

Infrastructure investments will pick up further on the back of accelerated issuance of special bond, and is expected to offset the influences from weakening investments in real estate. Meanwhile, the production and sales scenario of vehicles, home appliances and mechanics are all expected to improve in September.

In general, steel demand will remain resilient against the cut-down on crude steel output, supporting the steel market to hover at a comparatively high level in 2H.