The blast furnace (BF) capacity utilization rate of 247 Chinese steel producers examined between February 2-8 increased to 83.8%. In the same period, daily hot metal production increased by 0.27% to 2.24 million tons, and the operational rate of the factories reached 76.67%.
As more steel producers in China restarted their blast furnaces, the average daily consumption of imported iron ore also increased and reached 2.75 million tons/day, increasing by 0.8% in the period of February 2-8.
However, market sources indicate that growth in blast furnace production has slowed down and this is due to negative margins and stagnant demand. As the domestic steel market calms down ahead of the Chinese New Year holiday, mills appear less willing to increase production.
Among the 237 Chinese trading institutions surveyed, the spot trade volume of construction steel, wire rod and coil bar, including rebar, fell to a four-year low of only 4,151 tons as of February 4.
On the other hand, steel mills continued their production to ensure sufficient stocks so that iron ore traders do not close their businesses during the CNY holiday.
As of February 8, the total imported iron ore stocks held by the sampled steel producers reached 109 million tons, increasing enough to last the factories for 39.7 days based on consumption rates.
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