[Operating rate of blast furnaces] New blast furnaces were put into operation, and pig iron output rose slightly

The SMM survey showed that on June 12, the average operating rate of blast furnaces tracked by SMM stood at 93.91%, flat WoW; the capacity utilisation rate of blast furnaces was 95.85%, up 0.42 percentage points WoW. The daily average pig iron output of the steel mills in SMM’s survey sample was 2.2923 million mt, up 10,200 mt WoW.

Figure 1: New blast furnaces were put into operation, and pig iron output rose slightly

Data source：SMM

During this period (June 6-12), five blast furnaces were overhauled, three blast furnaces resumed production, and two new blast furnaces were put into operation. The overhauled blast furnaces were mainly concentrated in North-west China. Some steel mills indicated that terminal demand is weakening, and steel inventory accumulation is severe. Maintenance was conducted to reduce steel inventory. However, during this period, two new blast furnaces were put into operation in north China and east China, resulting in a significant pig iron output increase.

Looking ahead to next week, the SMM survey showed that the number of blast furnaces being overhauled is limited, and the pig iron output still shows an upward trend. However, considering the impact of high temperatures in June, terminal demand is weakening, and there is a trend of steel inventory accumulation. Some steel mills indicated that if inventory pressure is high, there might be temporary maintenance measures in the future to reduce inventory. Overall, the pig iron output increase may be lower-than-expected.