Active Production Resumption of Overseas Blast Furnaces May Boost Global Steel Supply

SHANGHAI, Feb 10 (SMM) - Recently, many overseas steel mills are actively resuming the production on expectations for economic recovery and stronger steel prices. According to the latest SMM survey, the average daily pig iron output of blast furnaces resuming production since January is expected to reach 50,000 mt.

In details, a 2,200 m² blast furnace in Europe resumed production in early January; the Swedish steel producer SSAB said that it restarted a blast furnace in Finland with an annual capacity of 1.3 million mt in early January; a 3,000 m² blast furnace in Spain restored production during the Chinese New Year holiday.

In Asian, a 5,000 m² blast furnace in Japan was back to production in mid-January.

In the future, there will still more increases in pig iron output in Asia. First, the production resumption of blast furnace in Japan in March will add 10,000-15,000 mt to the output. Next, the three blast furnaces to resume production in Vietnam will contribute an average daily pig iron output of 10,000 mt.

The production resumption of overseas blast furnaces will help balance the steel supply and demand. In this case, the overseas steel prices will pull back, and the opportunities for domestic exports will concentrated in February-April.

SMM believes that the production resumption of overseas blast furnaces will gradually exert pressure on the supply pressure. Since the demand in many places around the world is still weak due to inflation, the supply growth may be faster than that of demand in the short term. Therefore, the upward trend of global steel prices may encounter an inflation point.