More than 60% of EF steel mills have stopped operations, dragging down the operating rate

During the survey period (January 23rd to January 30th), the rebar prices moved rangedbound, the market took CNY holiday, and downstream construction units were shutting down one after another, affecting market transactions. More than 60% of EF steel mills shut down. The weekly operating rate of electric furnaces was 22.56%, down 31.04 percentage points MoM.

More than 90% of electric furnace steel mills in east China took CNY holidays, with most of them suspending production from Jan 25th to Jan 27th. The profit before the shutdown was generally less than 100 yuan/mt. Some steel mills have reached near the break-even line, and the resumption is expected around Feb 24th; in south China, most shutdowns are scheduled for early February. Steel scarp resources in the region are relatively sufficient, and the overall profit is relatively considerable compared to other regions. The shutdown is late, and the resumption time is expected to be around Feb 19th; in central China, profits declined slightly. Most EF plants suspended operations before the end of January, and some plan to produce until early February. In the southwest, nearly half of the regional EF plants have shut down furnaces last week. Production remained stable before the shutdown, but shipments were limited. The remaining electric furnaces are planned to be shut down around February 1st. The resumption time is uncertain, but most plan to resume production between Feb 19th and Feb 24.

Looking forward, according to SMM real-time survey results, most EF steel plants have stopped production. It is expected that electric furnaces will be completely suspended nationwide next week, and production may be resumed after Feb 19th.