At the end of March, spot prices in the steel sector stabilized after a sharp drop in the past month. EAF steel mills and some high-cost blast furnace steel mills have suffered losses and began to control the output of the supply side. At the same time, demand began to be released at the end of March, both ends of steel supply and demand have improved, supporting steel prices continue to rebound.
The output has declined
Since the end of March, the limited-production steel plant in Hebei has gradually resumed production, and the capacity utilization rate of blast furnaces has begun to pick up. According to statistical data, in the week of March 30, the national utilization rate of blast furnace capacity increased by 1.44% from the previous month to 73.18%, excluding the utilization rate of phase-out capacity of 79.41%. At the same time, in the sample, the proportion of profitable steel mills fell 1.23% to 84.05%, and existing steel mills suffered losses. We found that the marginal supply of shrinkage power, from the output data of the main steel varieties can be seen signs.
On the whole, although the steel mills in Hebei Province started to resume production, due to the reduction in profits, the steel mills can control the supply of steel by slightly controlling the proportion of scrap. It is expected that the increase in actual steel production after resumption of production will be smaller than that of molten iron.