SMM Electric Furnace Operating Rate: Operating Rate Edged Up 0.1% MoM, Regional Performance Still Diverged

During the survey period (January 6–January 13), the futures market overall showed a volatile trend, with the composite average rebar price rising 30 yuan/mt WoW. The profitability of electric furnace mills varied slightly across regions, leading to a mixed pattern in operating rates. Overall, the national electric furnace operating rate this week was 42.82%, up 0.1% from the previous period.

In east China, the electric furnace operating rate reached 47.5%, up 0.9% MoM. Benefiting from sound profitability this week, some enterprises slightly extended operating hours based on profit considerations. In south China, the electric furnace operating rate was 55.7%, flat MoM. Production conditions at electric furnace mills changed relatively little this week; recent fine weather in the region was suitable for downstream construction, and mill shipments were moderate. In central China, the electric furnace operating rate was 21.8%, up 1.8% from the previous period. As a few electric furnace mills recently resumed production, they extended operating hours and raised output levels to align with downstream rolling lines’ production schedules. In south-west China, the electric furnace operating rate was 38.5%, down 1.7% MoM. Due to recent increases in steel scrap prices, raw material procurement cost pressure mounted at electric furnace mills, leading to a noticeable pullback in scrap arrivals. Two electric furnace mills in the region reduced operating loads this week.

Overall, the national electric furnace operating rate increased slightly this week. Some mills moderately extended operating hours owing to acceptable profitability and shipments, but a few others cut production slightly as scrap price rises reduced raw material arrivals. Looking ahead, although electric furnace mills still have some profit support, cost pressure from subsequent scrap price fluctuations may limit further rises in operating rates. Therefore, the electric furnace operating rate is expected to see minor adjustments from current levels next week, with little likelihood of a trend shift.