China: BF mills' output rises to 3-month high; profits improve after holiday break

• Most mills maintain normal operations during Chinese holiday break
  
  
• Run rates to fall in early Mar'26 amid air pollution control measures
  
  

Mysteel Global: Production among Chinese blast furnace (BF) steelmakers rose further during 13-26 February, as most mills maintained normal operations during the extended Chinese New Year holiday and some mills ramped up their output, according to Mysteel's regular survey.

During the latest survey period, the average capacity utilisation rate among the 247 BF steel producers under Mysteel's tracking increased by 1 percentage point from the pre-holiday level to reach 87.5%, the highest since last November, while their combined hot metal also expanded by 1.2% to reach 2.33 mnt/day.

Over the same period, the average operational rate among these mills edged up 0.1 percentage point from the pre-holiday level to 80.2%, the survey showed.

Steelmakers saw their margins improve slightly after the CNY holiday, thanks to the weak performance of iron ore prices, Mysteel Global noted. As of 26 February, around 40% of the 247 BF mills Mysteel monitors could make some profits on selling their steel products, higher by 1 percentage point than two weeks earlier.

In tandem with the growing hot metal output, the total consumption of imported iron ore by the 247 steelmakers Mysteel tracks averaged 2.87 mnt/d during 13-26 February, increasing 1.1% from their pre-holiday consumption.

By 26 February, the total inventories of imported iron ore in all forms -- including those at mills, in transit, and at ports -- held by the same 247 mills dropped by a significant 16.2 mnt or 15.1% from February 12 to reach 90.9 mnt, the survey showed.

The existing stocks would be sufficient to last these mills for 31.5 days at their current usage rate, shorter by 6 days from the previous period, Mysteel assessed. The BF steelmakers mainly consumed their in-plant iron ore stocks for production during the CNY holiday as the market trading generally ceased, Mysteel Global noted.

In the coming week, the overall run rates at Chinese BF steelmakers are expected to decline, since integrated mills in North China's Tangshan have been ordered by local authorities to cut production during 4-11 March, Mysteel's survey suggests.

The production curbs are mandated to ensure good air quality for the "Two Sessions" -- the annual meetings of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference -- that will begin on March 4 in Beijing, as Mysteel Global reported.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.