Operating Rates of EAF Mills Drop Sharply in Apr amid Low Profits and High In-plant Inventory

SHANGHAI, May 11 (SMM) - The decline in operating rates and scrap consumption by EAF mills in April was caused by the plunging construction steel prices. In the meantime, the slump in construction steel prices greatly weakened the market sentiment and weighed heavily on the steel mills. And mills in south-west and south China had to reduce their production. By the end of April, when the price decline in construction steel accelerated, some mills were forced to suspend operation. In May, the construction steel and steel scrap prices may run stably. However, facing great pressure from low profit margins and high inventory, the EAF mills' average operating rate will hover around 35%-50%.