【Electric Arc Furnace (EAF) Steel】Finally Stabilizes and Rebounds, 

Doubling Production and Profit

Driven by both steel mill production cuts and recovering demand, the domestic steel market continued its steady upward trend this week, with the pace of destocking slightly faster than the same period last year, leading to improved market sentiment.

As of April 18th, the average price of domestic rebar was 3709 yuan, up by 126 yuan from the previous weekend, with the increase widening slightly. In terms of raw materials, domestic scrap steel prices saw a slight increase this week. Due to significant price pressure from steel mills earlier, coupled with the impact of heavy rain in the southern region, scrap steel arrivals were generally unsatisfactory. Some steel mills were forced to raise prices slightly to replenish their stocks. The average purchase price of scrap steel for electric arc furnace (EAF) steel mills increased by 52 yuan to 2439 yuan (without VAT) compared to the previous weekend. Although profits of EAF steel mills improved slightly this week, production increases were relatively limited due to sales and raw material procurement constraints.

According to statistics, as of April 18th, the capacity utilization rate of 135 EAF steel mills nationwide was 53.45%, up by 4.44% compared to the previous period, and the daily output of EAF steel reached 328,700 tons. Due to its excellent electrical conductivity, graphite electrodes are widely used in electric arc furnace steelmaking. Although downstream users still focus on procurement as needed, with increased financial support for real estate and accelerating infrastructure investment, as well as continued strong export markets, steel market demand is gradually emerging from the trough, and the sentiment of manufacturers is gradually improving.

As we mentioned in the past two weeks: "Prices of construction steel began to rebound in mid-April, and prices are expected to rise by 150-200 yuan in April." The operating environment of EAF steel mills is gradually improving, and both production and profits of EAF steel are expected to increase once again. For more information on the electric arc furnace steel market, feel free to contact us.