Electric Furnace Operating Rate Edged Up Slightly, but Subsequent Capacity Release May Be Constrained by Profitability

As of March 31, the operating rate of 50 electric furnace steel mills nationwide mainly producing construction materials was 41.42%, up 1% WoW from the previous period; the capacity utilization rate was 42.6%, up 0.86% WoW; and daily average production of construction materials was 94,900 mt, up 1,900 mt WoW.

During the survey period (March 24–March 31), the operating rate of electric furnace mills nationwide still maintained a slight rebound this week. At present, the profitability of construction materials production at most electric furnace mills was near the break-even line. Among them, profitability in Central China improved slightly, mainly because some electric furnace mills ensured production profitability by adjusting product specifications and markup strategies.

Overall, cost pressure on electric furnace mills remained in place. If finished steel prices continued to remain in the doldrums, production enthusiasm among electric furnace enterprises would gradually weaken, and the overall pace of capacity release might tend to slow, making a large-scale production increase less likely.