Steel prices rise to save the market; electric furnace operating rate increases 1.16% MoM this period

During the survey period (July 1-8), the spot price of rebar fluctuated upward, with the average price increasing 45 yuan/mt WoW. Influenced by the significant increase in spot prices, market sentiment recovered, and trading enthusiasm improved, leading to an overall increase in trading volume. Against this backdrop, although the operating efficiency of electric furnace mills had not yet escaped the loss-making range, significant improvements had been achieved. This week, one electric furnace mill resumed production, and two electric furnace mills extended their operating hours. Overall, the national electric furnace operating rate this week was 33.02%, up 1.16% WoW.
By region, in east China, the electric furnace operating rate this period was 39.5%, unchanged from the previous period. Since July, electricity prices in some regions have increased, leading to increased cost-side pressure for electric furnace enterprises, which to some extent offset the benefits of the increase in finished product prices. Currently, regional electric furnace mills still maintain the production rhythm of the previous period. In south China, the electric furnace operating rate this period was 37.7%, unchanged from the previous period. The spot price in the region increased rapidly this period, narrowing the losses of electric furnace mills. However, the overall trading situation had not improved significantly, and merchants mostly adopted a wait-and-see attitude towards the subsequent market trend, with production continuing at the previous operating level. In central China, the electric furnace operating rate this period was 24.5%, up 6.3% MoM from the previous period. One electric furnace mill in the region resumed production this period, and other electric furnace mills maintained production during off-peak and valley electricity periods, leading to an overall improvement in profit levels. In southwest China, the electric furnace operating rate this period was 26.5%, up 0.6% MoM from the previous period. Steel mills in the region refused to budge on prices, and the benefits of some electric furnace mills shifted from small losses to break-even. This period, two electric furnace mills extended their operating hours.
Looking ahead, with the continued impact of typhoons and high temperatures, terminal construction conditions are poor, and downstream demand may remain weak. The conditions for steel price increases are insufficient, and coupled with the current relatively low efficiency of electric furnace mills, the overall enthusiasm for production increases is lacking. Therefore, it is expected that the national electric furnace mill operating rate may remain low next week.