The steelmaker has three blast furnaces, each 2,500 cubic meters, at Changshou district in southwestern China's Chongqing municipal city. Its crude steel output capacity is currently at about 6.5 million mt/year.
"We do not foresee strong demand for steel from the downstream this year and we need to heed the government directive to reduce emissions and increase efficiency," the source said. "So we are planning to keep our planned target at 6 million mt, unchanged from last year."
The company source also said they were planning to bring onstream a new 1,700 cubic meters furnace in the near term but did not give a specific date.
According to the source, over 60% of the company's iron ore requirements are currently secured via term contracts, with the the rest purchased from spot market or port stock inventories.
Due to the volatility in raw material prices, the company plans to increase long-term supply contracts for iron ore.
"We are aiming to buy more seaborne iron ore from our contractual suppliers next year; but nothing had been finalized so far," the source said.
China's Chongqing Iron & Steel manufactures mainly flat products.
