One third of blast furnaces restarting, says UBS

Some 34% of blast furnaces idled during the peak of the Covid-19 pandemic are being restarted, UBS bank says in a new steel and iron ore market analysis published this week. The trend is set to continue further.

The bank calculates 72 blast furnaces were idled globally in response to the downturn in demand due to the coronavirus, meaning a capacity of some 132 million tonnes/year was temporarily curtailed. European steelmakers were the most active in idling BFs, stopping 20 of them; in Asia 19 were idled and in North America 17.

Of the idled furnaces globally, 22 are restarting. “In our opinion, this is not a surprise given the time constraints of hot idling and as demand is picking up,” UBS says in a note seen by Kallanish. “We expect most idled BFs to restart by end-20; this is needed for pig iron production ex-China to be flat h/h in 2H.”

The report notes that some furnaces were restarted because of demand recovery, while others need to be taken back into operation to avoid compromising their long-term production. “Some furnaces need to open up otherwise they will cool and block the furnace, rendering it inoperable,” the bank explains. “Steelmakers plan how long they want furnaces to run at zero and charge just the right raw materials for that length of time.”

Typically, the minimum length a BF is banked is approximately three months due to economics, while the maximum is around six months, after which it is hard to sustain the heat, UBS points out.