EAF operating rates recovered to 49% after scrap shortages eased

Published: Apr 1, 2020 14:02
Many electric arc furnace (EAF) steelmakers in China resumed production in the past fortnight as shortages of the raw material—steel scrap—eased. As of Tuesday March 31, operating rates across EAF steel mills in China stood at 48.64%, up 28.34 percentage points from mid-March and 41.06 percentage points higher than a month earlier, according to an SMM survey.

SHANGHAI, Apr 1 (SMM) – A number of electric arc furnace (EAF) steelmakers in China resumed production in the past fortnight as shortages of the raw material—steel scrap—eased.

 

As of Tuesday March 31, operating rates across EAF steel mills in China stood at 48.64%, up 28.34 percentage points from mid-March and 41.06 percentage points higher than a month earlier, according to an SMM survey.

 

 

Eased tightness, coupled with a plunge in steel prices sparked by bearish macro environment, high inventories and weak demand, pulled prices of steel scrap lower, helping some EAF mills returning to positive territory and encouraging them to recover production to normal. That also contributed to the sharp increase in the average EAF operating rate.

 

 

The survey showed that about 50% of EAF steel mills that have reopened now can see thin profits and most of them are located in south and southwest China.

 

About 27% of mills have reached the breakeven point, while 22.7% continue to run at losses. Despite bleak profit status, some EAF mills resumed production to maintain market shares after being shuttered for more than two months.

 

The resumption of EAF steel mills was also encourage by a raft of stimulus measures by local governments.

 

More than half of EAF steel mills surveyed by SMM said that they would not scale back operations in the near term, even if profits worsen. That suggests that the average operating rate across EAF steel mills in China is expected to stay at its current levels or inch further higher, which will weigh on steel prices.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn
For more information on how to access our research reports, please contact:service.en@smm.cn
Related News
Hunan Launches Second Round of Environmental Inspections, Affecting Lead-Zinc Mines
Jun 30, 2026 14:20
Hunan Launches Second Round of Environmental Inspections, Affecting Lead-Zinc Mines
Read More
Hunan Launches Second Round of Environmental Inspections, Affecting Lead-Zinc Mines
Hunan Launches Second Round of Environmental Inspections, Affecting Lead-Zinc Mines
Hunan Province has launched the second round of its provincial ecological and environmental protection inspection "look-back" campaign. The first batch of seven inspection teams has been fully deployed since June 13, 2026, covering the cities of Changsha, Zhuzhou, Yueyang, Shaoyang, Hengyang, Huaihua, and Zhangjiajie. According to market sources, some lead-zinc mines have suspended production as a result of the inspections. SMM will continue to monitor and assess the potential impact on zinc concentrate supply.
Jun 30, 2026 14:20
Australia Terminates Anti-Dumping Probe on South Korean, Vietnamese Galvanised Steel Sheets
Jun 23, 2026 16:31
Australia Terminates Anti-Dumping Probe on South Korean, Vietnamese Galvanised Steel Sheets
Read More
Australia Terminates Anti-Dumping Probe on South Korean, Vietnamese Galvanised Steel Sheets
Australia Terminates Anti-Dumping Probe on South Korean, Vietnamese Galvanised Steel Sheets
On June 19, 2026, the Australian Anti-Dumping Commission issued Notice No. 2026/088, terminating the anti-dumping investigation on galvanised sheet [Zinc Coated (Galvanised) Steel] imported from South Korea and Vietnam, following the withdrawal application submitted by the applicant BlueScope Steel Limited. Previously, on May 22, 2026, the Commission issued Notice No. 2026/071, initiating an anti-dumping investigation on galvanised sheet imported from South Korea and Vietnam, in response to an application filed by Australian domestic enterprise BlueScope Steel Limited.
Jun 23, 2026 16:31
Supply Gap Persists in Vietnamese Market, Spot Lead Traded at High Premiums
Jun 5, 2026 11:08
Supply Gap Persists in Vietnamese Market, Spot Lead Traded at High Premiums
Read More
Supply Gap Persists in Vietnamese Market, Spot Lead Traded at High Premiums
Supply Gap Persists in Vietnamese Market, Spot Lead Traded at High Premiums
[Ex-China Lead Market Dynamics] It was learned that the recent environmental protection inspections on secondary lead in the Vietnamese market had temporarily come to an end, and some lead smelters had gradually resumed production. However, in the face of the current primary lead supply gap, spot lead in the local market continued to maintain high premiums. According to the latest information, the CIF premium for Vietnamese lead ingots with Pb≥99.99% in June had reached $180/mt as a common transaction price, compared to around $165/mt in May.
Jun 5, 2026 11:08