Considering the completion of destocking of rebar under the old national standard in September, coupled with the expected strong demand in the peak season of “Golden September and Silver October,” the profitability of steel mills is expected to improve further. There is a possibility of increased and earlier resumption of production.
Review of Blast Furnace Shutdowns and Restarts at 247 Steel Mills in August
According to the data, as of August 30, Chengjiu‘s statistics show that the total hot metal production of the 247 steel mills in August decreased by 3.96 million tons compared to the previous month, totaling 70.01 million tons. The average daily hot metal production decreased by 128,000 tons per day to 2.258 million tons per day, a decline of 5.3%. The cumulative year-on-year decrease was 21.89 million tons, down 3.77%. Regionally, the decreases in Northeast China, Southwest China, and North China were particularly significant.
In terms of blast furnace shutdowns and restarts, as of August 30, Chengjiu’s statistics show that 15 blast furnaces resumed production in August, while 43 blast furnaces were under maintenance. Regionally, the maintenance activities were mainly concentrated in Hebei, Shanxi, Shandong, and Liaoning provinces, while the resumption of production was primarily seen in Hebei, Jiangsu, Shanxi, and Liaoning provinces.
Estimated Hot Metal Production in September: 2.26 Million Tons per Day
Shutdown and Restart Plans for Next Month
Based on research, nine blast furnaces are scheduled for maintenance in September, involving a capacity of approximately 33,300 tons per day. Additionally, 16 blast furnaces are planned to resume production, with a capacity of about 61,300 tons per day. If the current shutdown and restart plans are followed, the daily average hot metal production in September is expected to be 2.26 million tons per day.
Stabilization and Recovery of Daily Hot Metal Production in September
From the trend of hot metal production in recent years, it can be observed that September generally holds a higher production level, mainly because it is traditionally a peak demand season. However, this year differs from the last in that rebar will implement the new national standard on September 25. Recently, steel mills have been lowering prices to clear out old standard inventories, which has significantly reduced profitability, with the profit margin falling as low as 1.69%. Considering that the destocking of old standard rebar will be completed in September, along with the expected strong demand in the peak season, the profitability of steel mills is expected to improve further. There is also a possibility of increased and earlier resumption of production.
Conclusion
Based on research and statistics, it is estimated that in September, the daily average hot metal production of 247 steel mills will reach 2.26 million tons per day, an increase of 0.02 million tons per day compared to August.