Growing Terminal Demand Likely To Drive Steel Mills To Restart More Blast Furnaces In April

March, a traditional peak season, saw sluggish steel demand. Due to frequent rain and snow this year and funding factors, terminal production resumed slowly. The inventory of most steel mills was not quite high in view of low-level pig iron production, so some steel mills planned to resume production in March. Affected by environmental protection restrictions, poor regional demand, losses, etc., some steel mills also planned to put their blast furnaces under maintain. SMM research showed 27 blast furnaces had resumed production in March. In March, 8.5933 million mt of pig iron output was affected by BFs maintenance, up 1.1946 million mt MoM.

Entering April, the rising demand for construction steel drove inventory to fall, elevating the overall steel demand. Moreover, as the weather becomes warmer and central government bond funds have been issued, the terminal demand growth may accelerate, driving the inventory of steel mills to fall. Combined with the continued price decline in raw materials, steel mills' profits have recovered, thus more mills plan to resume production in April. SMM surveys showed another 9 blast furnaces are planned to be overhauled in April, which will cut pig iron output by 68,300 mt per day, while 24 blast furnaces will be restarted, translating into a daily increase of 120,600 mt of pig iron output. SMM estimates that a total of 6.7094 million mt of pig iron output will be affected by BFs maintenance in April, down 1.8839 million mt MoM.