【EAF Steel】Weak Expectations, New Standards Disrupt, Prices Hit New Low

Amidst weak fundamentals and a calm macroeconomic outlook, Chinese domestic construction steel prices continued to decline this week, reaching a new low for the year. As of July 25th, the average price of rebar in China was 3,338 yuan, down 129 yuan from last weekend.

Raw Materials:

The scrap steel market also saw a decline this week, with the average purchase price by steel mills dropping 73 yuan to 2,308 yuan (excluding tax).

Losses for electric furnace steel mills slightly expanded, leading some previously reduced production electric furnace steel mills to halt production for maintenance. Graphite Electrodes for Short Process Electric Furnace Steel, Specifications Reference.

Electric furnace steel production has decreased for eight consecutive weeks.

Electric Furnace Steel Production:

As of July 25th, the capacity utilization rate of 135 electric furnace steel mills nationwide was 47.37%, a decrease of 2.62% from the previous week.

Daily electric furnace steel production was 294,700 tons.

Market Sentiment:

The third plenum did not introduce significant favorable policies, and the proportion of local debt being rolled over remains high, resulting in noticeably low market confidence.

Additionally, from September 25th onwards, rebar will adhere to new national standards (old standard resources will theoretically be unable to circulate), causing a short-term increase in selling pressure and even a slight sense of panic in the market.

Outlook:

In the short term, Chinese domestic steel market still faces downward pressure. Both fundamental and sentiment aspects require time to recover. August may only see a weak rebound, with a real recovery not expected until at least September.

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