【Electric Arc Furnace Steel】 Construction Demand Revives, EAF Production Gradually Resumes

This week, China's construction steel market saw a slight rebound. Pre-holiday restocking ahead of Mid-Autumn Festival boosted demand, leading to improved transactions and continued inventory reduction. As of September 12, the average price of rebar in China stood at RMB 3,245, up RMB 62 from last weekend.

On the raw material side, scrap steel prices fluctuated slightly, with the average purchase price of scrap steel for EAF use increasing by RMB 23 to RMB 2,106/ton (excluding tax). The price difference between scrap types widened, with suppliers holding back sales and showing firm pricing stances, limiting the growth of scrap deliveries to steel mills. Graphite electrode products for supporting EAF steel production, market price guide.

EAF steel plants continued to steadily resume production this week. However, due to tight scrap supply and cost pressures, production times at operational mills remained constrained. As of September 12, the capacity utilization rate of 135 EAF steel mills nationwide was 39.98%, up 0.83% from the previous week. Daily EAF steel output reached 250,200 tons, marking a slight rise for three consecutive weeks.

The domestic steel market fundamentals have recently improved. In August, the issuance of new special bonds reached nearly RMB 800 billion, the highest this year. Steel exports also grew by 21% month-on-month. Combined with the proactive production cuts by small and medium-sized steel mills over the past two months, market confidence has slightly recovered. With the traditional "golden September, silver October" season, construction demand is expected to rebound, providing significant room for further increases in EAF steel output in mid-to-late September.

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