SHANGHAI, Sep 11 (SMM) – Driven by high profits, most independent electric arc furnaces (EAFs) in China are operating at full capacity. Some new capacities were newly commissioned in the east and south-west, SMM research found.
We expect the average operating rate across these EAFs to increase by 2 percentage points to 75% in September. Operating rates in August stood at 73%.
As of Monday September 10, costs for independent EAF production came in at 3,905 yuan/mt, based on a steel scrap price of 2,580 yuan/mt including tax. Profits stood at 535 yuan/mt based on Wanji’s offered price in the Shanghai market, SMM calculation showed.
SMM learned that most mills with EAFs have current margins of 500 yuan/mt.
Zhejiang Wantai Steel is not operating in full capacity as its sole EAF is out of order. Equipment faults continued to suspend production at Jiangxi Ji’an Steel, and it is unlikely to resume production within this year.
In the middle of August, Jiangsu Hongtai commissioned a EAF of 105 mt in operation and is expected to reach maximum capacity later this month. Chongqing Yonghang also put an EAF of 80 mt into trial operation.
