[Blast furnace operating rate] Blast furnaces in north and southwest China resumed production and the operating rate continued to rise

The average operating rate of blast furnaces at steel mills rose 0.45 percentage point from a week ago to 92.98% as of May 15, SMM survey showed. The average capacity utilisation rate stood at 94.62%, up 0.67 percentage point WoW. The daily average pig iron output of the steel mills in SMM’s survey sample stood at 2.2632 million mt last week, an increase of 16,200 mt from the previous week.

Figure 1: Blast furnace operating rates & Capacity utilisation rate

Data source: SMM

During this period (May 9-May 15), 2 blast furnaces were overhauled and 6 blast furnaces resumed production. Among them, the resumed blast furnaces were mainly concentrated in north China, southwest China and east China; the overhauled blast furnaces were concentrated in north China and southwest China (for detailed data, please refer to SMM blast furnace maintenance VIP table). Steel mills made decent profits this week, and most of them resumed production as planned, with pig iron output further increasing. Due to the recent continuous rise in raw material prices, steel mills' profits shrunk significantly. At the same time, June and July are traditionally the off-season for steel consumption, and the market has certain downward expectations for steel prices. Steel mills' profits may fall again. Therefore, SMM expects that steel mills' pig iron output may peak and fall back at the end of May and early June, and the increase in pig iron may slow down further next week.