【EAF Steel】Expectation vs. Reality, Narrow Fluctuations in Steel Prices

This week, Chinese domestic steel market showed slight increases, with actual transactions improving. However, due to the recent increase in electric arc furnace (EAF) steel plant restarts, the market remains in a stockpiling state. As of February 20, the domestic rebar average price was 3,380 CNY/ton, up 15 CNY from last week. Graphite electrodes are mainly used in electric arc furnace steelmaking, aluminum electrolysis, and ferrosilicon production. With the growth of electric furnace steel and new energy industries, the graphite electrode market is expanding, especially with increasing demand for high-power electrodes driven by environmental policies.

On the raw material side, Chinese domestic scrap steel prices have steadily risen, with many steel plants continuing to raise prices to secure supplies. Both deliveries and inventory have increased. The price of graphite electrodes remains stable, while the cost-driving effect of petroleum coke has significantly weakened.

As scrap steel has performed slightly better than steel products after the holidays, EAF steel plants' profits have continued to slightly decline, with operating time being somewhat constrained. According to statistics, as of February 20, the operating rate of 135 EAF steel plants in China was 34.77%, up 12.82% from last week, with daily EAF steel production reaching 217,700 tons, marking two consecutive weeks of growth.

In the past two months, real estate data has continuously rebounded, and changes in monetary and fiscal policies have significantly boosted the infrastructure industry, leading to some expectations for the recovery of steel demand post-holiday. Additionally, with recent easing in US-Russia relations, the market has begun to look forward to reconstruction demand from Ukraine.

In the game between expectations and reality, it is expected that the domestic steel market will continue to operate with narrow fluctuations in the short term, with limited space for price increases. The market is still awaiting the release of policies from the Two Sessions, particularly the anticipated policy support for the EAF steel industry.

Feel free to contact us anytime for more information about the EAF steel market. Our team is dedicated to providing you with in-depth insights and customized assistance based on your needs. Whether you have questions about product specifications, market trends, or pricing, we are here to help.