SHANGHAI, Jan 17 — SMM understood that output at steel mills continued to fall and end-user consumption nearly stalled ahead of Chinese New Year holidays.
Steel mills using Electric arc furnaces (EAFs) have all closed for CNY, with the average operating rate down 8.24 percentage points as of January 16 from a week earlier to zero. Most of them will not stop steel scrap recycling during CNY holidays. Several mills plan to resume production on January 29, and most will restart in early February. For steel mills using blast furnaces (BFs), they will maintain production with a low productivity during CNY holidays. Weekly rebar output will stand at 2.3-2.4 million mt. Eight BFs and one rolling production line will restart after maintenance post the holidays. The affected building steel output by maintenance will decrease 81,600 mt in the first week after the holiday.
In the domestic spot market, most merchants have shut down for CNY. Spot trades were quiet. There were only several trades which will make delivery after CNY holidays. Quotations dropped slightly to the level at the closing of last Thursday. Some traders plan to resume operations on January 29. But as most downstream enterprises of building materials resume work late, mostly after February 5th, it is expected that the market will remain quiet for a while. Spot prices will follow the trend of futures prices.