SMM Electric Furnace Operating Rate: Operating Rate Edged Up 0.94% WoW with Slight Regional Divergence

During the survey period (December 30 to January 6), the futures market generally showed a fluctuating trend, while the spot market weakened, with the composite average price of rebar dropping by 20 yuan/mt WoW. On the production side, although the profitability of electric furnace mills declined, their overall profit remained above the break-even point, prompting some mills to extend operating hours this week. Overall, the national electric furnace operating rate this week was 42.72%, up 0.94% WoW.

In east China, the electric furnace operating rate was 46.6%, down 0.6% WoW. Some mills slightly reduced operating hours to align with market supply and demand amid weaker post-holiday sales. In south China, the operating rate reached 55.7%, up 1.3% WoW, supported by favorable weather and reasonable profitability, leading some enterprises to moderately extend operating hours. In central China, the operating rate rose to 20%, up 5% WoW, as several mills resumed production according to planned schedules, gradually releasing capacity and driving the regional operating rate higher. In south-west China, the operating rate held steady at 40.2% WoW, with little change in the supply-demand pattern and generally stable sales, prompting most mills to maintain previous operating levels.

This week, finished product spot prices fluctuated rangebound. Although electric furnace mill profits declined, overall profitability remained positive, with most mills maintaining their previous production pace. Some regional mills flexibly adjusted operating hours based on actual changes in market supply-demand and prices. Looking ahead, with several mills planning to increase production next week, the overall electric furnace operating rate is expected to continue rising. Close attention should be paid to raw material price trends and end-use demand changes.