【EAF Steel】 High Temperatures and Rainy Season Arrive, 

Downstream Demand Weakens

This week, the domestic construction steel market saw weak transactions, with only a few end-users replenishing inventories as needed. As of June 6, the average domestic rebar price was 3,673 yuan, down 93 yuan from the previous weekend. Welcome to learn about the product specifications guide for graphite electrodes used in electric arc furnaces.

In terms of raw materials, scrap steel prices also gradually fell this week. The average purchase price of scrap steel by EAF steel mills decreased by 68 yuan from the previous weekend to 2,427 yuan (excluding tax). Although the losses are not substantial, due to increased factory inventories and expectations of weaker demand in the construction steel market, some independent EAF steel mills have appropriately increased production restrictions.

As of June 6, the capacity utilization rate of China's 135 EAF steel mills was 59.06%, a decrease of 1.64% from the previous week, with EAF steel production reaching 363,300 tons per day.

With the arrival of high temperatures and the rainy season, the demand for steel in June has weakened. Coupled with the previous increase in production from both blast furnaces and EAFs, the supply pressure on the steel market has increased. The positive effects of new real estate policies, infrastructure funding, and steel production cuts for emission reductions are expected to be felt after July. Therefore, Chiniese domestic construction steel market in June is likely to be dominated by a decline, with EAF steel mill profits and production also expected to fall.

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