Holiday Wave Approaches! Operating Rates at Steel Mills Using Externally Purchased Billets to Continue Pulling Back in February

Published: Jan 30, 2026 17:31

Save

[SMM Billet Utilization Survey] According to an SMM survey, as of January 30, the operating rate of steel mills using externally purchased billets that mainly produce construction steel stood at 24.49%, down 0.11% MoM from December but up 24.49% YoY.

In January, national construction steel prices fluctuated downward. The average spot price of rebar was 3,159 yuan/mt on January 30, down 21 yuan/mt MoM. The price reached its monthly high of 3,197 yuan/mt on January 8 and fell to the monthly low of 3,158 yuan/mt on January 28.

Cost side, recent environmental protection-related controls led to temporary production cuts at some coking plants in northern China, tightening effective coke supply. Downstream steel mills showed stronger restocking sentiment ahead of the holiday, pushing the supply-demand structure for raw materials into a tight balance. Most coking enterprises also maintained reasonably low inventory levels, supporting the successful implementation of the current coke price hike.

Supply side, operating rates at BF and EAF steel mills diverged. Most BF mills still retained slight profits, and previously idled rolling lines largely resumed production as planned, increasing construction steel output. In contrast, EAF mills reduced operating hours voluntarily due to declining margins and rising difficulty in sourcing steel scrap. As the Chinese New Year holiday neared, billet-using mills began entering holiday shutdowns, with one additional mill closing this month, contributing to the overall decline in their operating rate.

Demand side, with the Spring Festival approaching, domestic construction steel demand entered the traditional off-season. End-user construction sites progressively halted work, and downstream procurement pace slowed noticeably, leading to a clear seasonal drop in steel demand.

Overall, as the holiday approaches, downstream end-user projects will suspend operations in succession. Feedback from the end-use market indicates that most construction sites plan concentrated shutdowns in early February, causing terminal steel procurement demand to shrink gradually and actual rigid steel demand to decrease markedly. At the same time, EAF mills and billet-using mills will begin large-scale annual maintenance shutdowns, reducing industry steel supply simultaneously. The market is expected to maintain a pattern of weak supply and demand. With billet-using mills facing concentrated holidays in early February, their operating rates are projected to continue declining in February.

Steel

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

1 hour ago

Touchi Joins SMM 2026 (3rd) Global Renewable Metals Summit as Banquet Title Sponsor, Shaping Green Future Together

Shanghai Metals Market (SMM) is delighted to announce that Touchi International Corp has officially joined our 2026 (3rd) Global Renewable Metals Industry Summit to be held in Tokyo, Japan, on May 11-12, 2026, as the Banquet Title Sponsor.

1 hour ago

2 hours ago

[SMM Hot-Rolled Coil Daily Trading] Futures first rose then fell, spot low-price transactions moderate

[SMM Hot-Rolled Coil Daily Trading] On February 4, the total daily trading volume of hot-rolled coils from SMM's four-city (Shanghai, Lecong, Tianjin, Ningbo) sample enterprises was 11,140 mt, up 500 mt (42.7%) MoM, up 4.7% YoY on a Gregorian calendar basis, and up 46.58% YoY on a lunar calendar basis.

2 hours ago

SiMn futures fluctuated with an upward trend, and market wait-and-see sentiment remained strong [SMM SiMn Futures Review]

2.4 News: The SM2605 contract opened at 5,842 yuan/mt and finally closed at 5,868 yuan/mt, up 0.31%. The daily highest price was 5,880 yuan/mt and the lowest price was 5,826 yuan/mt. Trading volume was 118,900 lots, and open interest was 354,221 lots. Today, SiMn futures edged up under pressure. Cost side, overall manganese ore transaction prices remained high and the market temporarily stabilized, providing strong cost support for SiMn alloy prices. In 2026, the cost support from local electricity prices in Inner Mongolia and electricity prices in south China for alloy costs was under verification, but a rise was likely. At the start of the week, SiMn alloy cost support temporarily stabilized. Supply side, newly added SiMn furnaces in the main northern production areas gradually started producing iron, increasing supply pressure for standard SiMn. Operating rates at alloy plants in south China remained stably low. In 2026, the intensity of electricity fee policies in Guangxi and Guizhou awaited verification; most plants maintained off-peak production. With the Chinese New Year approaching, manufacturers chose temporary shutdowns, adopting a strong wait-and-see attitude, pending post-holiday electricity settlement prices. Currently, loose supply pressure for SiMn persisted. Demand side, HBIS Group's SiMn procurement for February 2026 awaited verification. The current SiMn market continued to be dominated by volatile movements.

2 hours ago