Raw materials prices strengthened as steel makers restocked

SHANGHAI, Jan 15 (SMM)—An SMM survey showed that the average operating rate of BFs at Chinese steel makers inched up 0.4 percentage point on the week to 88.4% as of January 14. This was 0.26 percentage point higher than the same period last year. Some steel makers completed maintenance this week, which contributed to the rise in operating rates. 

Demand for steel products continued to weaken as new confirmed COVID-19 cases are still rising in China. Trading volume of construction steel rebar fell to about 130,000 mt this week, while inventories continued to build up. However, coke supply was relatively tight as virus-induced lock downs in Hebei affected transport of raw materials and as some steel mills needed to restock before the Chinese New Year holiday. Meanwhile, prices of iron ore and steel scrap were also strong. Rising production costs narrowed profits, but also supported steel prices.

Operating rate of BFs at Chinese steel makers