【SMM Analysis】EAF Operating Rate Rises 0.76% During Off-to-Peak Season Transition

As of August 25, the operating rate of 50 major construction-steel-focused EAF steel mills nationwide stood at 32.97%, up 0.76% week-on-week; capacity utilization rate was 32.97%, up 1.67% from the previous period; average daily construction steel output reached 73,400 tonnes, up 3,700 tonnes week-on-week.

During the survey period (August 19–25), operating conditions across regions showed slight divergence. Specifically, operating rates in East China, Central China, and Southwest China all increased to varying degrees. The primary drivers were: recent tightening of coking coal supply strengthened cost support, combined with sentiment recovery following the earlier steep decline, leading to a rapid short-term rebound in construction steel prices. Meanwhile, scrap prices rose only modestly, improving per-tonne profitability for EAF mills — many turned from losses to profits, boosting production enthusiasm and leading to modest increases in operating hours. In South China, individual mills also extended operating hours, but because some mills halted production at the beginning of this period, the regional operating rate declined rather than increased. However, early resumption of production remains possible going forward.

Looking ahead, infrastructure projects are set to launch successively in September. The market is currently in the transition phase between off-peak and peak demand seasons. Construction steel prices are expected to remain range-bound in the short term, with per-tonne margins fluctuating within a narrow band. EAF mills may resume production or extend operating hours next week, which would drive a modest increase in the EAF operating rate in the next period.