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EAF steelmaker operating rates plunged amid losses
Jan 10,2020 10:45CST
data analysis
Source:SMM
SMM forecasts the rate to continue to slip to 29% as of January 10

SHANGHAI, Jan 10 (SMM) – Operating rates across Chinese electric arc furnace (EAF) steelmakers extended their decline in January as profit margins remained negative. 

 Profits at EAF steelmakers (source: SMM)

SMM assessments showed that the operating rates across EAF steelmakers in China averaged 46% as of January 8, down 22 percentage points from December 25. The average rate edged lower from a five-month high of 69% in early December and stood at 68% as of December 25. 

SMM forecasts the rate to continue to slip to 29% as of January 10. 

Operating rates across Chinese EAF steelmakers (Source: SMM)

Most EAF steelmakers planned to recover production in early February after the Chinese New Year holiday. But the availability of steel scrap and profits will remain a determinant of whether they will resume as scheduled and when the operating rates will return to the pre-holiday level, given current continued tightness of steel scrap supply.

SMM expects operating rates across EAF steel mills to rebound in mid-February as steel scrap providers may not resume supply until February 9. The recovery of operating rates, however, will be capped if steel prices remain subdued in February. 

Operating rates
EAF

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