Steel prices are lower than expected. Most electric furnaces plan to resume production after Feb 24 [SMM electric furnace operating rate]

According to SMM research, as of February 20, the operating rate of the China's 50 electric furnace steel plants that mainly produce building materials was 3.44%, up 3.44% MoM; the capacity utilization rate was 3%, up 3% MoM; the average daily output of building materials was 6,700 mt, up 6,700 mt MoM.

During the research period (February 6-February 20), steel prices fell again, and the market failed to get off to a good start. The futures market opened high on the first day and continued to fall on the next day. The spot price also dropped driven by the market, and downstream work has not yet resumed, making it difficult to increase demand. Some EF steel mills have chosen to postpone the resumption of production, and most still plan to resume production after Feb 24. The operating rate of electric furnaces in this week's sample is 3.44%.

Looking forward, some steel mills have already lowered their production plans or carried out maintenance to reduce pressure on the supply, and the market still has expectations for favorable policies. Steel prices may rise after the adjustment. In addition, downstream construction will start after Feb 24. The number of electric furnaces resuming production may increase sharply.