Steel production falls in China and iron ore demand weakens

Steel production in China has experienced a second consecutive week of decline. 

The high furnace capacity utilization of 247 Chinese steel producers analyzed fell to 83.34% between February 23 and 29. The primary reason for this decline was the closure of facilities for maintenance. 

With the decrease in production, pig iron production has also declined. The daily pig iron production of 247 enterprises decreased by 0.3% weekly to 2.23 million tons. 

Iron ore demand is also beginning to weaken. The daily iron ore consumption of 247 steel producers showed a second consecutive week of decline, reaching 2.7 million tons between February 23 and 29. This situation stems from the recent low demand for this raw material among local steel producers looking to replenish their stocks. 

Decreasing demand has also led to a drop in iron ore prices in China recently. However, the low iron ore prices have helped increase the margins of steel producers. 

Market experts anticipate a rebound in rolled steel consumption this spring. This recovery is likely to be supported by the resumption of construction activity following the Lunar New Year holidays and the consequent increase in steel consumption.