Profitability Remains Stable with Support, Electric Furnace Operating Rate Advances Further

During the survey period (December 24–December 30), the futures market generally exhibited a fluctuating trend, while the spot market showed synchronized stabilization, with the composite average price of rebar flat WoW. On the production side, the profitability of electric furnace steel mills did not fluctuate significantly this week, with only a few regional mills seeing improved margins. Overall, the national electric furnace operating rate was 41.78%, up 0.92% WoW.

East China: the operating rate reached 47.13%, up 1.1% WoW. Some electric furnace mills reported improved shipments, leading enterprises to extend operating hours accordingly to adapt to marginal demand improvements and enhance order conversion efficiency. South China: the operating rate stood at 54.3%, flat WoW. Sunny weather this week created favorable conditions for construction sites. Downstream end-user procurement pace saw relatively small changes, but as electric furnace mills had previously optimized their operating levels, the overall production pace maintained the previous trend without significant output adjustments. Central China: the operating rate was 15%, down 0.5% WoW. Due to environmental protection inspections, some electric furnace mills implemented temporary production cuts, though the overall impact duration was limited. South-west China: the operating rate reached 40.2%, up 2.3% WoW. Benefiting from supplemented steel scrap arrivals and maintained reasonable profit margins, some electric furnace mills slightly increased operating hours.

This week, spot prices of finished products maintained a narrow fluctuate rangebound, with little change in electric furnace mill profits. Most mills maintained their previous production pace, while some regional mills flexibly adjusted operating hours based on order intake and fulfillment. Looking ahead, reports suggest that some regions plan to lower electricity prices starting January, which is expected to benefit electric furnace mill profitability. Coupled with multiple mills already announcing plans to increase production next week, the overall electric furnace operating rate is anticipated to continue rising.