【Graphite Electrode】Survey Statistics on China's Independent EAF Production (July 26, 2024)

【Graphite Electrode】Survey Statistics on China's Independent EAF Production (July 26, 2024)

This week, our network surveyed the production conditions of 87 independent electric arc furnace (EAF) steel mills in China, of which 76 are dedicated to producing construction steel. The results are as follows:

1. Operating Rate: The average operating rate of the 87 independent EAF steel mills in China is 65.26%, a decrease of 0.1 percentage points from the previous week and a year-on-year decrease of 6.99 percentage points. High thermal conductivity and electrical conductivity graphite electrodes play a key role in short-process electric arc furnace steelmaking. There was a significant increase in the Northeast and Northwest regions, a slight increase in the South China region, a slight decrease in the East China, Central China, and Southwest regions, and stability in other regions.

2. Capacity Utilization Rate: The average capacity utilization rate of the 87 independent EAF steel mills in China is 44.51%, a decrease of 0.47 percentage points from the previous week and a year-on-year decrease of 6.06 percentage points. There was a slight increase in the Northeast and South China regions, a slight decrease in the East China, Central China, Southwest, and Northwest regions, and a slight decrease in other regions.

3. Daily Crude Steel Output: The average daily crude steel output of the 87 independent EAF steel mills decreased by 1.05% compared to the previous week.

4. Rebar and Wire Rod Weekly Output: Among the 76 construction steel EAF steel mills, the weekly rebar output decreased by 0.99%, while the weekly wire rod output increased by 2.72%.

5. Profitability: The profitability of the 76 construction steel EAF steel mills is as follows: 11.84% of the steel mills are making a small profit, 47.37% are breaking even (some due to suspension of production), and 40.79% are experiencing losses.

This week, the operating rate and capacity utilization rate of China's independent EAFs have slightly decreased. In terms of production suspensions and resumptions:

• A steel mill in the Central China region suspended production on July 17, involving an 80T electric furnace, with resumption time undetermined.

• A steel mill in the East China region suspended production on July 18 due to losses, involving a 60T electric furnace.

• A steel mill in the Southwest region suspended production for half a month on July 18 due to a furnace malfunction, involving a 100T electric furnace.

A batch of electric furnaces resumed production this week:

• A steel mill in the South China region resumed production of a third electric furnace this week, reaching normal operating levels.

• A steel mill in the Northeast region resumed production of a 105T electric furnace on July 17.

• A steel mill in the Northwest region resumed production of a smaller electric furnace, a 50T electric furnace, on July 18.

This week, the profitability of steel mills continued to decline, with the proportion of loss-making steel mills increasing by 7.9 percentage points from the previous week, and the degree of losses remaining severe. Due to the transition between the old and new national standards, traders were eager to sell off inventory, leading to a concurrent downward trend in both futures and spot prices, with rebar prices dropping by more than 100 yuan/ton. Due to the high-temperature season, scrap resources were relatively tight, resulting in stable scrap prices with smaller declines. The spread between rebar and scrap prices has noticeably narrowed, leading to reduced production enthusiasm among steel mills, some of which slightly shortened their production time, and some began production halts for maintenance.

Looking ahead to next week, a steel mill in the South China region plans to resume production on August 1. Due to the lack of significant recovery signs in finished products, it is difficult to repair losses for EAF mills. It is expected that the operating rate and capacity utilization rate of independent EAF mills may continue to decline slightly next week.

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