SHANGHAI, Feb 9 (SMM) – The average operating rate at 110 blast furnace-based steel mills across China stood at 85.24% in January, according to SMM research. This is up 0.67 percentage point from December 2017.
We expect the average operating rate to be lower at 84.78% in February due to weak demand in the off season.
Higher operating rates in January was mainly due to restarts of some temporary production cuts. Lower rebar prices since mid- to late December have also prompted steel traders to restock more, which translated to better trading liquidity.
SMM believes steel prices would go up after Chinese New Year as downstream demand recovers more quickly than mills’ production.
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