[SMM Analysis] Electric Furnace Operating Rate Continues to Decline This Week

Published: Jul 15, 2026 11:53

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As of July 14, the operating rate of 50 electric furnace steel mills nationwide that mainly produce construction materials stood at 36.58%, down 0.16 percentage points WoW; capacity utilization rate was 36.56%, down 0.09 percentage points WoW; and daily average construction materials production was 81,400 mt, down 200 mt WoW.
During the survey period (July 8–July 14), mill operating conditions varied slightly across regions. In detail, mills in Southwest and South China largely maintained their current production pace. In East China, some electric furnace mills were affected by typhoon “Bavi” over the weekend, with shipments disrupted and inventory pressure relatively high, leading them to reduce operating hours. In Central China, a few electric furnace mills faced tight steel scrap supply, and difficulty in procuring scrap also led to lower operations.
Looking ahead, short-term fundamentals for construction materials have relatively limited driving force, and prices will continue to fluctuate at low levels. Steel margins per tonne are unlikely to see significant improvement. Meanwhile, natural factors such as typhoons and floods occur frequently, limiting construction site activity, and end-use demand will most likely remain weak. Mills still face expectations of inventory buildup. Therefore, mills’ production enthusiasm is expected to be quite limited in the short term, and mills may continue operating on flat or off-peak electricity.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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