Steel prices increased amid optimistic outlook on demand recovery

SHANGHAI, Feb 25 (SMM)—The average operating rate of blast furnaces (BFs) at Chinese steel mills gained 1.1 percentage points from pre-holiday levels to 87.1% as of February 25. This was 3.2 percentage points higher than the same period last year. 

Steel prices surged after the Chinese New Year holiday, and profits of steel makers expanded, which encouraged them to ramp up production. In addition, construction sites restarted operations 1-2 weeks earlier than previous years as more workers had stayed where they work for the Spring Festival, and this boosted demand for steel products.

Although the increase in stamp duty on the Hong Kong stock market and rising coke prices weighed on steel prices this week, steel inventory buildup was lower than previous years due to improving demand.