SHANGHAI, Jul 31 (SMM) – Operating rates of blast furnaces at Chinese steelmakers inched up this week, as some mills resumed production after logistical disruptions caused by heavy rain and floods eased.
An SMM survey showed that the average operating rate of BFs at steel mills in China increased 0.23 percentage point from the previous week to 90.3% in the week ended July 29.
The supply recovery is unlikely to derail steel prices in China from their uptrend on expectations of demand increase on back of the government’s post-flood reconstruction projects. A separate SMM survey showed that trading volume of construction steel—rebar, wire and rods—has picked up in recent days, hitting a high of 240,000 mt on July 29.
Positive market sentiment will also support steel prices, given the rally in mainland Chinese stocks and as the US Federal Reserve kept its interest rates unchanged at near zero and vowed to maintain its bond purchases and the array of lending and liquidity programs aimed at shoring up the economy amid the coronavirus fallout.
A steelmaker in east China wrapped up the flood-induced maintenance this week, while another mill in the northeast plans to put a BF under maintenance for 40 days starting from August 10, according to the SMM survey.