According to SMM survey, the capacity utilisation rate of domestic iron ore mines was 56.7% in January, up 0.2 percentage point MoM. Concentrate output in January was 21.135 million mt, down 414,000 mt MoM. Mines gearing up production for a good start into the year, coupled with pre-holiday steel mills stocking, accounted for the growth in capacity utilisation rates.

Mines in some areas usually started 2024 with a good start. For example, some mines in Shandong, Anhui and Liaoning increased capacity utilisation in January. Despite this, overall capacity utilisation of mines in China edged down in January, mainly due to three reasons: 1) There was maintenance in January after year-end production rush. In order to complete annual production target for 2023, some large mines increased output in December 2023 and postponed annual maintenance to January; 2) Some mines took holidays in advance; 3) Weather factors. There was shutdown of more mines in colder weather in northern China. In addition, there are also areas where falling water levels amid weather fallout made for no water available, shutting down mines.

The capacity utilisation rate of mines may plummet in February, mainly because 1) most private mines will take holidays for 3 to 15 days. In addition, production efficiency of state-owned mines will decline due to the holiday fallout; 2) With the end of stockpiling of most steel mills, less demand will unfold during the holiday, taming production of mines.