【EAF Steel】Scrap Steel Price Increase for Stock Replenishment, 

Slight Decrease in EAF Profits

This week, the domestic construction steel market has seen a slight increase, with market demand recovering and a modest expansion in the reduction of construction material inventories, leading to a relatively stable mindset among manufacturers. As of April 25, the average price of domestic rebar steel was 3,717 yuan, an increase of 8 yuan from the previous weekend.

In terms of raw materials, this week's domestic scrap steel prices have risen more than steel prices. During the May Day period, many steel mills continuously raised prices to replenish stocks, with the average purchase price of scrap steel for electric arc furnaces adjusted up by 41 yuan to 2,480 yuan (excluding taxes) compared to last weekend, which has further narrowed the average profits of electric arc furnace steel mills. Graphite electrodes with high electrical and thermal energy are widely used in the production of electric furnace steel. However, due to the significant increases in ore and coke prices this week, coupled with a surge in manganese silicon prices, the cost difference between scrap steel and molten iron has significantly narrowed by about 150 yuan compared to last week, making the profits of electric arc furnace (eaf) steel mills roughly equivalent to those of medium and small long process steel mills. Production remains relatively stable, and the number of steel mills resuming production in the past two weeks has exceeded the number undergoing maintenance shutdowns.

As of April 25, the capacity utilization rate of 135 electric arc furnace steel mills in China was 54.87%, up 1.43% from the previous week, with daily steel production reaching 337,500 tons. Recently, domestic policies aimed at stimulating consumption and promoting trade-ins have been frequent, providing a boost to the automobile and home appliance industries. Additionally, there are signs of a revival in infrastructure investment. The trillion yuan of national bonds issued at the end of last year are being rapidly implemented, providing financial support for the growth of infrastructure investment. Combined with a continuously booming export market, these factors will play a key role in stabilizing and boosting steel prices, and also open up opportunities for the development of electric arc furnace steel. Regarding the market situation of electric arc furnace steelmaking, feel free to contact us at any time.