【EAF Steel】Slow Recovery in Demand Boosts 

Electric Arc Furnace Steel Profitability

This week, signs of stabilization and slight rebound were observed in China's construction steel market. However, persistent heavy rainfall in the south and the Qingming Festival holiday led to insufficient sustainability in the rebound, with a slow decline in social inventories.

As of April 7th, the average price of rebar in China was 3514 yuan, a decrease of 14 yuan compared to the previous weekend. Regarding raw materials, domestic scrap steel prices fluctuated this week, with a general sharp decline in steel mill purchase prices since last weekend. Suppliers held back sales due to seasonal factors, resulting in a continuous decrease in steel mill arrivals. Many manufacturers were forced to raise prices again midweek to replenish their inventories. Overall profitability of electric arc furnace steel mills rebounded this week, but due to sales pressure, most manufacturers did not operate at full capacity. Specification of graphite electrode products for electric furnace steelmaking. According to statistics, as of April 7th, the capacity utilization rate of 135 electric arc furnace steel mills in China was 48.8%, up 0.09% from the previous period. Daily production of electric arc furnace steel reached 297,500 tons.

Currently, the steel market has entered a destocking phase, with significant production cuts in long-process steel mills, alleviating market supply pressure. Meanwhile, favorable policies are being implemented. The issuance of 3.9 trillion yuan in new local special bonds and 1 trillion yuan in ultra-long-term special treasury bonds will open up space for expanding social investment in the future.

In April, China's steel market demand is expected to further recover, combined with a high probability of a rebound in raw material prices. Construction steel prices are expected to rise by 150-200 yuan, and the operating environment for electric arc furnace steel will continue to improve.  Short process steel market analysis, follow us to learn more.