Production Gradually Recovered, And The EF Steel Mill Operating Rate Rebounded This Week

SHANGHAI, Oct 18(SMM) – According to SMM research, as of October 17, the operating rate of 34 electric furnace (EF) steel plants in China that mainly produce rebar was 38.79%, up 3.32 percentage points WoW. The capacity utilisation rate was 39.73%, up 2.49 percentage points WoW. The average daily output of rebar was 70,800 mt, up 4,400 mt WoW.

During the survey period (October 10 to October 17), steel prices stopped falling and fluctuated within a narrow range. Demand suppressed by market sentiment in the early stage was gradually released. The inventory pressure of EF steel mills eased slightly, and some plants suspended production during the holiday and resumed recently, driving the overall operating rate of sample enterprises in this period to increase by 3.32 percentage points WoW to 38.79%. From a regional perspective, the tight supply of steel scrap in East China loosened, and the loss of finished steel narrowed slightly. Coupled with some steel plants’ operating rates returning to early status after technical transformation, the operating rate rose significantly by 8 percentage points WoW to 49%. In South China, the pace of shipments this cycle remained normal, and the inventory pressure in the factory was gradually easing. The regional steel scrap price followed the trend of finished steel and maintained a dynamic balance. Profit didn’t see an obvious WoW improvement, and the production start-up was relatively stable at 41%. In Central China, single-shift and single-line production dominated, production and sales were stable, and the operating rate remained low at 18%.

In Southwest China, some electric furnace plants suspended during the holiday resumed production. However, the Sichuan and Chongqing regions were affected by continued losses. EF steel mills reduced production time, leading to the operating rate standing at 37%, a slight increase from the previous month. In the follow-up, the regional proactive production cuts will be gradually implemented. Most steel mills maintained their minimum production status and production enthusiasm was average. If there is no obvious profit improvement in the short term, the operating rate is expected to remain low and relatively stable.