SHANGHAI, Dec 12 (SMM) – Production enthusiasm across Chinese electric arc furnace (EAF) steelmakers waned in December as declining spot prices pushed them into losses, SMM research found.
SMM estimates that operating rates across EAF steelmakers who produce steel products with scrap as feedstock averaged 72% in December, down 5 percentage points from November.
Spot rebar prices came in at 3,670 yuan/mt, Wantai’s offered price in the Shanghai market as of Tuesday December 11, down 19.34% from 4,550 yuan/mt at the beginning of November, SMM assessments showed.
As of Tuesday December 11, costs for EAF-produced rebar that met new standards came in at 3,846 yuan/mt, based on a steel scrap price of 2,300 yuan/mt. Losses stood at 206 yuan/mt based on Wantai’s offered price in the Shanghai market, SMM calculation showed.
For EAF steelmakers in east China, costs came in at some 3,600 yuan/mt, excluding alloy costs, SMM learned. This pushed most EAF steelmakers across the region close to losses and some mills began to cut output.
Emission checks across Zhejiang province shut some mills for rectification and this also lowered operating rates.
Losses across mills in central China expanded to some 1,000 yuan/mt while mills in the south saw profits of 300 yuan/mt. Most southern mills are operating at full capacity.
