SMM Electric Furnace Operating Rate: First Increase Breaks the Ice, Can the Upward Momentum Continue Next Week?

During the survey period (November 4–November 11), spot prices fluctuated. After macro sentiment-driven trading, market speculation enthusiasm waned, and trading logic returned to supply and demand fundamentals. Market trading activity remained subdued. This week, the average rebar price remained flat WoW. Electric furnace mills saw a slight improvement in profitability, though overall they remained in the loss zone. Nationally, the electric furnace operating rate this week was 36.4%, up 0.68% WoW.

In east China, the electric furnace operating rate this period was 43.8%, up 0.1% WoW. One electric furnace mill slightly increased operating hours due to adjustments in critical peak electricity periods, leading to a slight rise in the regional operating rate. In south China, the rate was 45.2%, unchanged WoW. Favorable weather this week supported construction site activity, driving a slight increase in downstream demand and modest improvements in both shipments and profitability for regional electric furnace mills. In central China, the operating rate was 18.6%, flat WoW. Most mills maintained previous operating levels as profitability saw little change, though some plan annual maintenance starting in December, which may lead to a slight decline in regional supply. In south-west China, the rate was 30.6%, up 2.4% WoW, as one electric furnace mill resumed production as scheduled, boosting the regional operating rate.

Overall, with the traditional peak demand season for steel having passed, steel demand is expected to remain constrained by factors such as weather, funding, and insufficient project reserves. However, given that some electric furnace mills have confirmed production resumption plans for next week, the national electric furnace operating rate is expected to increase slightly, though a significant rise is unlikely.