Production situation at Chinese steel mills

Key changes at domestic steel mills, providing real-time insights into capacity utilization, inventory replenishment trends, inventory levels, profitability, and industry sentiment. Which steel mills have resumed production? What is the priority for raw materials? What is the impact from policies?

North China Steel Mill A

• All blast furnaces maintained normal operations throughout June, with no new maintenance. Output was slightly higher than the same period last year.
• Gross profit was around RMB200/ton, up slightly from May. The mill operated at full capacity and is expected to maintain normal production.
• III. New orders were stable compared to May, with no steel export orders.
• Finished steel inventories were minimal, but no specific figures were available.
• The mill mainly uses IOCJ, MACF, SSF, MBF, and NML, with no change in the ore selection trend. The current blending ratios for sinter, lump, and pellets are 73%, 18%, and 9%, respectively. These ratios have not changed recently. Raw material inventory is about 10 days, which is considered normal.

North China Steel Mill B

• There was no new maintenance or restoration work for the blast furnace in June. Output was similar to the same period last year.
• Gross profit was about 50 yuan/ton, similar to May. Despite the decline in raw material prices, finished steel prices are also weak. The mill is operating at full capacity and has no plans to cut back.
• Steel orders are average. Rebar is showing a seasonal trend of stockpiling, although the increase is not large. Rebar is mainly sold to neighboring markets, not exported.
• Finished steel inventory is around 50,000 tonnes, which is normal. Rebar inventory is not considered high.
• The mill mainly uses PBF, Ukrainian concentrate and BRBF. The mill has replaced domestic concentrate with Ukrainian concentrate. The current blending ratios for sinter, lump ore and pellets are 56%, 22% and 22%, respectively. Due to the tight supply of Shanxi concentrate, the mill has purchased imported concentrate. Raw material inventory is around 8 days and is expected to decrease further amid falling prices.

East China A Steel Mill

• There was no maintenance or restoration of new blast furnaces in June. Output was generally unchanged compared to the same period last year.
• Gross profit is around 200 yuan/t, although the profit margin is narrowing. The mill will maintain normal production as long as it is profitable.
• New orders decreased across all categories compared to May.
• Finished steel inventories were at normal levels, in line with seasonal averages.
• The mill mainly uses major ores such as PBF, IOCJ, SSF and PBL. There has been no recent change in ore selection trends. Current blending ratios for sinter, lump ore and pellets are 70%, 20% and 10%, respectively. There has been no recent adjustment. Raw material inventories are around 15 days, slightly lower than normal.

East China Steel B

• There was no new maintenance activity for blast furnaces in June. A furnace that began maintenance last month has not resumed production and the restart schedule remains uncertain. The shutdown of this furnace for routine maintenance has reduced daily hot pig iron output by around 6,000 tonnes. Output is lower than the same period last year.
• Gross profit is about 100 yuan/ton, about the same as in May. There are no signs of production adjustment, and operations remain stable.
• Order performance is unclear due to division separation, but market sentiment is not optimistic.
• Finished product inventory is stable, similar to the previous level.
• The plant mainly uses medium and low-grade ores such as PBF, SSF and SP10 fines. The current blending ratios for sintered ore, lump ore and pellets are 70%, 20% and 10% respectively. There is no change in this ratio. Raw material inventory is about 30 days, unchanged from the previous level.

Source: Mysteel