【SMM Analysis】EAF Operating Rate Up 1.24% This Period

As of September 22, the operating rate of 50 EAF steel mills mainly producing construction steel nationwide stood at 36.80%, up 1.24 percentage points period-on-period; the capacity utilization rate was 37.22%, up 1.38 percentage points PoP; and average daily construction steel output was 82,900 mt, up 3,100 mt PoP.

During the survey period (September 16–22), most regions maintained their current production pace, with only East China posting a modest rise in EAF operating rates. Specifically, integrated profitability at most EAF mills in East China stayed above 50 yuan/mt, and a few mills resumed production as planned or slightly increased operating hours. This week, the national EAF operating rate rose 1.24% PoP.

Recently, scrap collection at steel mills has become easier, and pre-holiday restocking at end-users has been fair, with inventories continuing to destock. Construction steel fundamentals are trending stable-to-improving, and production enthusiasm remains fair. However, with the Mid-Autumn Festival and National Day holidays falling in the next period, market demand may decline notably. To avoid inventory and cash-flow pressure, mills will mostly maintain a flat and off-peak power production schedule.