[SMM Analysis] Current EAF Operating Rate Pulls Back 2.28% WoW

Published: Jul 1, 2026 09:20

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As of June 30, the operating rate of 50 EAF steel mills mainly producing construction steel nationwide was 39.0%, down 2.28% WoW; the capacity utilization rate was 40.89%, down 2.10% WoW; and the daily average production of construction steel was 91,100 mt, down 4,700 mt WoW.
During the survey period (June 24–June 30), mills in all regions reduced operating hours to varying degrees. Specifically, several EAF mills in east China shut down one of their EAFs during the period due to rolling line commissioning or prolonged losses; in south China and central China, frequent rainy weather disrupted outdoor site construction, and coupled with weak profitability, some mills reduced operating hours; in southwest China, many EAF mills experienced resource outflows, while electricity subsidy policies narrowed the profitability gap between long‑process and short‑process operations, allowing some EAF mills to maintain per‑mt profit near the break‑even line and slightly increase operating hours, but a few mills, concerned about in‑factory inventory, marginally lowered operating rates, leaving overall rates in southwest China with relatively small fluctuations.
Looking ahead, short‑term supply‑demand imbalances in construction steel have emerged, and inventory pressure is showing signs of amplifying, with prices likely to consolidate at lows. With July still in the traditional off‑season for demand, per‑mt profitability at EAF mills is unlikely to improve. Further reductions in operating hours or shutdowns cannot be ruled out, and the nationwide EAF operating rate is expected to continue declining in the next period.

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.

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