Electric furnace mills saw significant profit recovery, with operating rates likely to rise further next week.

During the survey period (July 8–15), rebar spot prices fluctuated upward, with the average price rising 55 yuan/mt WoW. Driven by the "anti-rat race" policy, overall market sentiment improved. Coupled with coke price hikes and production restriction news in the north, steel cost support strengthened, and market reluctance to budge on prices intensified. This period saw rebar price increases in many regions outpacing steel scrap, turning electric furnace mills from losses to profits, with some extending operating hours. Overall, the national electric furnace operating rate this week was 33.8%, up 0.78% WoW.

In east China, the electric furnace operating rate remained flat WoW at 39.5%. While finished product prices rose and mill profitability improved, off-season factors kept mills cautious, maintaining stable operations. In south China, the operating rate fell 0.6% WoW to 37.1%. Although regional mills turned profitable, with one extending operating hours, this was offset by another mill halting for equipment upgrades, leading to a slight decline. In central China, the operating rate dropped 5.8% WoW to 18.8%. Despite improved profits from higher finished product prices and one mill extending hours, Hubei mills halted due to weak sales, resulting in a slight decline. In southwest China, the operating rate rose 6.6% WoW to 33.1%, as one mill resumed production while another reduced hours per group requirements.

Overall, persistent high temperatures continue to suppress actual end-user demand due to seasonal factors. However, sentiment-driven and policy-supported expectations have kept spot prices at elevated levels, significantly improving electric furnace mill profitability. With two mills set to resume production as planned next week, the national electric furnace operating rate is expected to rise slightly.