According to analysts at UBS (the largest Swiss financial holding) in a report dated September 8, about 22 blast furnaces are currently being restarted by steel mills around the world, as demand for steel increases, as well as for production reasons.
Restarts represent about 34% of total blast furnace capacity that has been shut down or temporarily shut down due to COVID-19, with the rest expected to be restarted by the end of the year, according to the report.
“This is not surprising given the hot idle time constraints and rising demand,” said analysts led by Miles Allsop. “We expect most of the idle blast furnaces to be restarted by the end of the 20th year; this is necessary in order for pig iron production outside of China to remain constant hourly per hour in the second half of the year. ”
In 2020, due to factors related to COVID-19, a total of 72 blast furnaces worldwide with a capacity of 132 million tons of crude steel were stopped or booked, according to UBS, citing a CRU study.
According to both UBS and CRU surveys, there were 31 out-of-service blast furnaces in Europe, of which 8 were restarted; 26 in North America, 6 of which have been restarted; 13 in Latin America, of which 4 were restarted; 46 in Asia, of which 16 were restarted, and 15 in the rest of the world, of which 6 were restarted.
Some steelmakers are restarting their furnaces in response to demand, which has partially recovered from April lows, but remains about 30% lower compared to July, according to UBS. Others, however, are reopening their ovens because otherwise they will cool off and could lock up and fail, analysts say.
“Typically, the minimum shelf life of a blast furnace in a can is about three months due to economic considerations, and the maximum is about six months (after which it is difficult to withstand the heat),” they said.
Companies that have cut blast furnaces this year include ArcelorMittal, voestalpine, Thyssenkrupp, Vallourec, Salzgitter, US Steel, SSAB, Ferreira di Servola, Isdemir, Liberty, AK Steel, Nucor, Stelco, Usiminas, Gerdau and CSN, according to UBS. …
Impact on iron ore
Iron ore, a key ingredient in blast furnace steelmaking, is likely to fall over the next six months due to increased inventories and inventories in Brazil, despite expectations of increased demand from steel companies that will bring the blast furnaces back, according to UBS. into operation.
Analysts expect prices of 62% Fe fines supplied to China to fall to $ 85 /t in 2021, after hitting a six-year high of $ 130 /t last week, “with Brazil’s supply recovering faster than global steel production, ”They said.
“Iron ore stocks in Chinese ports are up 2 million tons per week after being stable over the previous five weeks; they are now at their highest level since April 20, ”UBS reported. “The stocks of ships outside the key iron ore ports in North China have decreased by 1 million tonnes, but remain high at 17 million tonnes (on average since January 18, about 6 million tonnes) due to congestion in ports after changes in customs protocols and bad weather. “