Chinese steel mills will resume full production in the second quarter

Since the steel mills limited production in the fourth quarter of last year, with the expected recovery in demand, steel mill production began to expand in January this year, but the steel mill production was blocked in February, and the growth rate of steel production fell from January to February 2020. The cumulative production of crude steel in the first two months was 154.702 million tons, an increase of 3.1% year-on-year, and the growth rate decreased by 5.2 percentage points. The cumulative production of crude steel in the first two months was 132.3350 million tons, an increase of 3.1%, and the growth rate decreased by 2.2 percentage points.

Judging from the higher frequency data, crude steel production in March is increasing, and the increment is expanding. As of mid-March, the average daily output of crude steel from key Chinese steel enterprises was 1,836,600 tons / day, an increase of 28,000 tons from the previous period.

From the perspective of steel mill construction, blast furnace production in late March has gradually returned to normal levels in previous years. The blast furnace operating rate currently reaches 65.88%. Electric furnace production is limited by the difficulty of personnel movement and recovery is slow. As of the end of March, the national average electric furnace operating rate was only 46.74%, but some domestic markets, such as the southwestern market, have achieved 100% start-up. With the gradual arrival of staff, the supply of scrap and other raw materials is gradually restored. The resumption of electric furnace production is expected to progress steadily. It is expected that most electric furnaces will resume normal production by early April. In the second quarter, Chinese steel mills will resume full production.