【EAF Steel】The Brewing Power of Trends, Awaiting a Breakthrough Direction

As the year-end approaches, Chinese domestic construction steel market remained stable this week, with moderate terminal restocking activity. In the latter half of the week, localized price increases were driven by futures trends. Graphite electrodes improve energy efficiency in steel and non-ferrous metal smelting (aluminum, copper, zinc), especially in electric arc furnace steelmaking and other electric heating furnaces. As of December 26, the average domestic rebar price stood at 3,414 CNY, up by 9 CNY from last Friday.

Raw Materials: Scrap prices fluctuated slightly this week, with some steel mills raising prices for year-end restocking. This encouraged base shipments, resulting in increased arrivals and inventory at mills. Production at southern EAF steel mills remained stable, with some Guangdong producers even increasing output against market trends. In contrast, northern regions experienced more apparent production restrictions.

Statistics: By December 26, the capacity utilization rate of 135 EAF steel mills in China was 50.03%, down 0.84% from last week, with daily EAF steel output at 313,100 tons, marking nine consecutive weeks of decline. Both blast furnace and EAF steel production have continued to decline in December, easing market supply pressure and driving inventories down.

The recent National Fiscal Work Conference proposed more proactive fiscal policies in 2025, including larger-scale government bonds, reinforcing market confidence.

Challenges: However, with current EAF steel mill profit levels, widespread shutdowns during the Spring Festival seem inevitable. The revival of EAF steel hinges on the effective implementation of policies favoring EAF production.

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