Intelligent Production Adjustment in Chinese Steel Mills
Chinese steel mills have put management and optimization strategies for production volume on their agenda in order to align their operations with new market conditions and changes in profit margins; a trend that reflects producers' intelligent approach in facing seasonal fluctuations in demand and raw material costs.
According to Mining News, citing “Mysteel Global,” the latest assessments indicate that the capacity utilization rate among 247 large blast furnace (BF) steel mills in China during the period of July 3–9 reached 90.6%, with a slight adjustment of 0.8 percentage points. Meanwhile, daily pig iron production has been directed to the range of 2.41 million tons.
The report indicates that the rise in global prices of raw materials, including iron ore and coke, along with the seasonal decline in demand—which is a natural characteristic of the summer market—has driven producers toward optimal value chain management. According to monitoring conducted up to July 9, 40% of the steel units surveyed have managed to maintain their profitability balance in favorable conditions.
In the raw materials supply sector, the average daily consumption of iron ore in these mills was recorded at 2.96 million tons. Additionally, the total volume of imported iron ore inventories, with a slight change of 1.7%, stood at 88.9 million tons, which ensures feed supply security for the mills for the next 30 days.
Market experts predict that with the continuation of the summer calm period and the need to balance profit margins, a clearer picture and trend of Chinese mills’ management strategies regarding supply volume adjustment will emerge in the coming weeks.