[Ferro-Alloys.com] Chinese steel mills have cut the proportion of direct charge materials in their iron ore blend amid elevated prices, though demand for higher-grade sintering ores has persisted.

Buyers started cutting the proportion of direct-charge materials in January — first reducing pellet usage and then lowering the lump proportion, sources said.

"We have cut our pellet ratio to 8-10pc from around 15pc since January," an east China steel mill manager said.

"We first cut the pellet ratio to 16pc and then cut the lump ratio to 12pc. We have also increased the sintering ratio to 72pc in February," a Hebei-based steel mill manager said.

Sinter feed typically accounts for the bulk of the ore burden in a Chinese blast furnace, with mills often varying the proportion of lump and pellets based on cost and environmental considerations.

"We cut the pellet ratio to 10pc from 16-17pc in January and then cut the lump ratio by around 5pc starting February, while increasing the sintering ratio at the same time. Pellet and lump prices are too high now," another Hebei-based steel mill manager said.

"The ongoing Tangshan production restrictions are still supporting pellet and lump prices but sintering costs are way cheaper so we will try to increase the sintering ratio," he added.

Tangshan production restrictions on blast furnace and sintering operations were put in place on 22 February to control emissions. The end date of these restrictions will be made known later.

Lump prices have also been rising since November amid winter demand. As a direct-charge material, lump ores do not need to undergo the environmentally harmful pelletising or sintering processes. Restrictions are typically applied on such processes during the winter months to control emissions.

Source: Argusmedia

• [Editor:kangmingfei]