[EAF Steel] Survey Statistics on China's Independent EAF Production (July 12, 2024)

【EAF Steel】Survey Statistics on China's Independent Electric Arc Furnace Production (July 12, 2024)

Production Status of 87 Independent Electric Arc Furnace (EAF) Steel Plants (76 of which are for construction steel production):

1. Operating Rate: The average operating rate of 87 independent EAF steel plants in China is 64.75%, down by 5.24 percentage points from the previous week and 3.89 percentage points from the same period last year. Slight declines were seen in Northeast, East China, Central China, Northwest, and Southwest regions, while a slight increase was observed in South China; other regions remained stable. Graphite electrodes for EAF steel production are available in a full range of specifications. For details, refer to the specifications.

2. Capacity Utilization Rate: The average capacity utilization rate of 87 independent EAF steel plants in China is 44.74%, down by 4.29 percentage points from the previous week and 5.36 percentage points from the same period last year. Slight declines were seen in Northeast, North China, East China, Central China, Southwest, and Northwest regions, while a slight increase was observed in South China.

3. Daily Crude Steel Output: The daily average crude steel output of the 87 independent EAF steel plants decreased by 8.75% week-on-week.

4. Construction Steel Production: Weekly rebar production of the 76 independent EAF steel plants decreased by 6.20%, and the weekly production of wire rods decreased by 15.18%.

5. Profitability: Among the 76 construction steel independent EAF steel plants, 14.47% are marginally profitable, 51.32% are breaking even (some due to shutdowns leading to a break-even situation), and 34.21% are running at a loss.

This week, the operating rate and capacity utilization rate of China's independent EAF steel plants have significantly declined. Regarding shutdowns, several plants in East China, Northeast, South China, and Central China underwent maintenance and shutdowns. Specific details are as follows: 

Regarding raw material scrap prices, recent adjustments have mainly seen a decline, with a drop of 10-50 yuan/ton. Although the overall cost of scrap collection has decreased, the quantity of scrap arrivals is low due to generally weak terminal demand and high temperatures and heavy rains in most parts of China. As a result, some steel plants continue to report difficulties in collecting scrap, leading to reduced production times to lower output. Currently, high temperatures are gradually setting in across various regions, bringing electricity usage into focus again. Sichuan Province, a major EAF province, recently issued documents for power regulation, stating that from July 1 to August 15, EAF short-process steel enterprises must reduce their power load by more than 60% from 10:00 to 23:00 each day, while normal production can resume from 23:00 to 10:00 the following day. Other regions may also issue similar documents successively.

For next week, EAFs in the Southwest and Northwest regions that were previously shut down will resume production on the 11th and 14th, respectively. It is expected that the operating rate and capacity utilization rate of independent EAF plants will slightly decrease next week.

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