SMM Electric Furnace Operating Rate: Advancing Amidst Differentiation; Electric Furnace Mills' Operating Rate Increased Slightly This Week

During the survey period (May 6-13), the spot price of rebar fluctuated, with overall trading conditions remaining weak. Currently, the operating status of electric furnace steel mills varies across different regions. In the south-west region, due to electricity subsidies, market efficiency has recovered, and some electric furnace steel mills have increased their operating hours. In the south China region, affected by rainy weather and difficulties in collecting steel scrap, some electric furnace steel mills have slightly reduced their operating hours. Overall, the national electric furnace operating rate this week was 37.16%, up 0.64% WoW.

By region, in east China, the electric furnace operating rate this period was 43%, up 3.9% from the previous period. One electric furnace steel mill resumed production this week, driving up the overall regional operating rate. In south China, the electric furnace operating rate this period was 48.2%, down 1.4% from the previous period. Affected by heavy rainfall, construction site operations were hindered. Additionally, electric furnace steel mills in the region are currently suffering severe losses, with individual mills incurring losses of 70-100 yuan/mt, leading to a reduction in operating hours. In central China, the electric furnace operating rate this period was 16.6%, down 3.8% from the previous period. Maintenance work at blast furnace steel mills in Hubei led to an overflow of market share, prompting some electric furnace steel mills to increase their operating hours. However, temporary maintenance at electric furnace steel mills in Henan drove down the overall regional operating rate. In the south-west region, the electric furnace operating rate this period was 32.8%, up 1.1% from the previous period. Electricity subsidies in the region have improved the overall profitability of electric furnace steel mills. This week, two steel mills extended their operating hours, driving up the overall regional operating rate.

Overall, the operating status of electric furnace steel mills varied across regions this week, with operating rates increasing in east and south-west China and decreasing in central and south China. It is expected that two electric furnace steel mills will resume production as planned next week, so the electric furnace operating rate is expected to increase slightly next week.