Wave of Shutdowns Hits! Electric Furnace Operating Rate Expected to See Seasonal Decline

During the survey period (January 20–January 27), spot prices of building materials weakened this week, electric furnace mill profitability continued to decline, and coupled with increased difficulty in steel scrap recycling at this stage, the production pace of electric furnace enterprises slowed down this week. Among them, two electric furnace mills voluntarily reduced operating hours, and one electric furnace mill entered a shutdown due to equipment maintenance, leading to a significant decrease in overall operating hours for domestic electric furnace mills this week.

As the Chinese New Year approaches, SMM conducted a survey on the annual holiday arrangements of electric furnace mills nationwide. The survey results show that most electric furnace mills are concentrated on taking holidays in early February.

In east China, the holiday period for electric furnace mills spans a wide range. One electric furnace mill started its holiday early on January 20 due to temporary maintenance arrangements, two electric furnace mills will begin their holidays on January 31, and the remaining mills are concentrated on taking holidays between February 5 and February 10.

In southern China, electric furnace mill holidays are relatively concentrated in early February, with most enterprises taking holidays between February 5 and February 10.

In central China, two electric furnace mills are under long-term shutdown, while the remaining enterprises are concentrated on taking holidays in early February.

In southwestern China, electric furnace mill holidays are distributed from early February to mid-February, with most steel mills scheduling holidays between February 5 and February 14.

Looking ahead, as the Chinese New Year holiday approaches, domestic electric furnace mills will gradually enter the annual holiday period. According to SMM survey data, most domestic electric furnace mills currently plan to officially shut down for the holiday in early February, with only three electric furnace mills confirmed to take holidays at month-end (January). Some electric furnace mills have yet to finalize their holiday schedules. Given that electric furnace mills will successively begin their Chinese New Year holidays next week, production scale is expected to further contract, and therefore the operating rate of domestic electric furnace mills is anticipated to enter a seasonal downward trend next week.