[SMM Electric Furnace Operating Rate] Electric Furnace Mills' Profitability Improves, Operating Rate Rises 0.52% WoW

During the survey period (November 12–November 18), spot prices fluctuated upward, with the average price rising 48 yuan/mt WoW. The increase in steel scrap prices lagged behind that of finished products, leading to improved profitability for electric furnace mills. This week, four electric furnace mills nationwide increased their operating hours. Overall, the national electric furnace operating rate for the week was 36.92%, up 0.52% WoW.

In east China, the electric furnace operating rate was 43.8%, flat WoW. Profitability of regional electric furnace mills improved slightly, with some enterprises achieving marginal profits, though most mills maintained the previous week’s operating levels. Future production will be adjusted flexibly based on market prices and supply-demand conditions. In south China, the operating rate was 45.9%, up 0.8% WoW. Favorable weather conditions supported downstream construction activities, significantly boosting market transaction activity. Coupled with improved profitability, production enthusiasm increased, and one electric furnace mill extended operating hours. In central China, the operating rate was 19.8%, up 1.1% WoW. Maintenance at some blast furnace steel mills in the region led to shortages of certain specifications, prompting some electric furnace mills to moderately increase production to fill the gap. In south-west China, the operating rate was 31.2%, up 0.6% WoW. Driven by a widening price spread between rebar and scrap, profitability of regional electric furnace mills improved markedly, with some mills turning losses into profits. Two electric furnace mills increased operating hours this week.

Overall, electric furnace mills' profitability improved this week, with some achieving a turnaround from losses to profits. If the price spread between rebar and scrap continues to widen, cost-side pressure on electric furnace mills will further ease, enabling the restart of some marginal capacity. Given that some electric furnace mills plan to increase production next week, the national operating rate is expected to rise further. Close attention should be paid to changes in the rebar-scrap spread and order intake in the coming period.