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Try the Free AI Search EnginePositive Steel Production Trends in China Driven by Increased Iron Ore Output
China’s steel market is experiencing a very positive sentiment, primarily due to rising iron ore production rates. In the article BHP boosts iron ore output amid pricing pressure from China, BHP Group has reaffirmed its robust production guidance, achieving a 5% increase to 69.7 million tons in Q2. This uptick in iron ore supply aligns with satellite data showing stable or increasing activity levels across major steel plants. However, the restrictions imposed by China Mineral Resources Group on purchases from BHP have led to pricing pressures, prompting strategic adjustments in sourcing.
Recent satellite-observed activity trends reflect this favorable market dynamic. The mean activity level in Chinese steel plants fluctuated throughout late 2025 into early 2026, showing notable activities:
Baowu Group Echeng Iron and Steel Co., Ltd. has experienced a decline to a low point of 30% in January 2026, well below the mean activity level. This drop may relate to the disruptions in iron ore procurement strategies due to rising prices and competitive pressures outlined in BHP produced a record 146.6 million tonnes of iron ore in the second half of the year. Conversely, Wulanhot Steel Co., Ltd. consistently maintained high activity levels, peaking at 70% in August, indicative of robust demand in building and infrastructure. Its stability supports the idea of ongoing production commitments amidst shifting supply chains resulting from cooperation efforts, as discussed in the article Fortescue strengthens cooperation with China for uninterrupted ore supply.
Baosteel Desheng Stainless Steel Co., Ltd. showed initial stability at around 60-63% but has remained subjected to fluctuations, which could correlate with the overall dynamic changes in iron ore pricing and availability that have affected procurement strategies. However, no explicit direct connection can be established between the observed shifts in activity and the news articles.
To navigate the current market conditions, steel buyers should consider optimizing their procurement strategies. The recent production peaks from BHP and Fortescue suggest that securing contracts ahead of potential price increases may be prudent. Furthermore, given the restricted purchase dynamics from CMRG, engaging with alternate suppliers or enhancing cooperation with existing partners could mitigate risks linked to supply disruptions in the coming months.