SMM Electric Furnace Operating Rate: Two electric furnace plants resumed production as scheduled, with the national operating rate rising to 38.46%

During the survey period (May 13 - May 20), the spot price of rebar first rose and then fell, with overall trading conditions being average. Currently, the operating status of electric furnace plants varies across different regions. In South China, due to rainy weather and poor sales of finished steel products, one electric furnace plant conducted furnace maintenance. In Central and Southwest China, two electric furnace plants resumed production as planned, driving up the overall operating rate of electric furnaces. Overall, the national electric furnace operating rate this week was 38.46%, up 1.3% WoW.

By region, in East China, the electric furnace operating rate this period was 43%, unchanged from the previous period. Affected by the decline in finished steel prices, the profits of electric furnace plants in the region have decreased, and currently, the benefits of most steel mills have reached the break-even point. In South China, the electric furnace operating rate this period was 46.3%, down 1.9% from the previous period. With the increase in hot and rainy weather, downstream construction has been hindered. Coupled with the poor profits of electric furnace plants in the region currently, one electric furnace plant has a three-month furnace maintenance plan scheduled for this week. In Central China, the electric furnace operating rate this period was 21.9%, up 5.3% from the previous period. This week, one electric furnace plant completed temporary maintenance and resumed production as planned, driving up the overall regional operating rate. In Southwest China, the electric furnace operating rate this period was 36.1%, up 3.3% from the previous period. With electricity subsidies in the Chengdu and Chongqing regions, the overall profit levels of electric furnace plants are moderate. Additionally, with one electric furnace plant in the region resuming production this week, the overall regional operating rate has increased.

Overall, with the arrival of hot and rainy weather in China, traditional demand has slightly contracted. However, against the backdrop of a significant contraction in the proportion of real estate demand, the resilience of steel demand remains. It is expected that there will still be electric furnace plants with production resumption plans next week, and the overall electric furnace operating rate may still see a slight increase.