[SMM Analysis] Shrinking Profits Weigh on EF Steel Mill Operating Rates

Published: May 19, 2026 17:19

Save

As of May 19, the operating rate of 50 major construction material-producing electric furnace steel mills nationwide was 40.2%, down 1.7% WoW; capacity utilization rate was 42.3%, down 0.63% WoW; daily average production of construction materials was 94,300 mt, down 1,400 mt WoW.

During the survey period (May 13–May 19), regional performance showed slight divergence. In east China, some steel mills still maintained per-mt steel profits at high double-digit levels and slightly raised operating hours. In south China, steel mills saw per-mt profits shrink or even turn to losses, with multiple electric furnace mills reducing operating hours or halting production for maintenance, causing the nationwide electric furnace operating rate to decline 1.7% WoW.

Overall, electric furnace per-mt steel profits were significantly affected by market fluctuations. Continued price pullbacks, combined with the market being dominated by rigid-demand low-price procurement, led to involution among steel mills, with per-mt profits mostly staying at low levels and limited production enthusiasm. Meanwhile, scrap steel sourcing difficulties persisted. In the short term, most electric furnace mills are expected to maintain off-peak electricity production levels, and electric furnace operating rates may continue to decline.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

1 hour ago

MMi Daily Iron Ore Report (May 22)

Iron ore futures weakened today, with the most-traded contract I2609 closing at 792 yuan/mt, down 0.13% from the previous trading session. Port spot prices were basically flat compared to the previous day.

1 hour ago

2 hours ago

[SMM HRC Daily Trading] Spot Transactions Remained Weak

[SMM HRC Daily Trading] On May 22, the total daily HRC trading volume of sample enterprises in SMM's four cities (Shanghai, Lecong, Tianjin, and Ningbo) was 13,010 mt, down 520 mt or 3.8% DoD, down 7.8% YoY by the Gregorian calendar, and up 14.63% YoY by the lunar calendar.

2 hours ago

"HRC Prices and Demand Weaken; Inventory Declines, Cost Pressures Persist"

Cold-rolled and hot-rolled prices edged down this week, with overall transactions weakening WoW. In terms of supply, rolling line maintenance decreased WoW this week, with reduced impact volume, and overall HRC production increased. Demand side, apparent demand rebounded slightly this week. Inventory side, SMM's HRC social inventory this week was 4.5281 million mt, down 185,300 mt WoW, down 3.93% WoW. By region, North China, east China, and Northeast China saw notable inventory drawdowns, the central and western regions saw narrow destocking, while the South China market continued inventory buildup. Cost side, coking coal and coke futures weakened this week, suppressing coking coal and coke prices. Iron ore was in the doldrums following .....

2 hours ago