SHANGHAI, Feb. 16 (SMM) – Recently, electric furnaces, which had been required for suspension, intended to restart production. Several electric arc furnaces (EAF) and intermediate frequency furnaces started production, but stopped again yesterday for environment protection inspections. 

SMM latest survey of electric furnaces finds that there is little chance to see intermediate frequency furnaces come online again. 
Not long ago, China’s National Development & Reform Commission and Ministry of Industry & Information Technology again proposed to eliminate all line frequency induction furnaces for construction steel and intermediate frequency furnaces before late June 2017. 

Plants, having electric arc furnaces, have shifted their focus to upgrade old furnaces to meet production requirements, SMM survey finds. Those plants arranged production at intermediate frequency furnaces before the policy, and did not run its electric arc furnaces for high costs, and now have decided to upgrade those furnaces before being put into production. The upgrade will also help them reduce costs. 

Some plants told SMM that they are mulling over the upgrading plan, and will start production at electric arc furnaces after the overhaul, but production will continued to be restricted by current stricter inspections.  

In addition, some blast furnace steel mills now show high interest in resuming production at electric arc furnaces, as low steel scrap prices have sent costs at electric arc furnaces lower than those at blast furnaces. 

According to SMM data model calculation, rebar costs at integrated steel mills are 3,067 yuan per tonne (excluding finance costs) based on ore prices at $92 per tonne, with profits at 343 yuan per tonne. At present, steel scrap procurement price is around 1,880 yuan per tonne, leaving costs at electric arc furnaces around 2,680 yuan per tonne. 

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