【EAF Steel】Weak Supply and Demand in the Steel Market, Northern EAF Production Cuts

Graphite electrodes are the essential consumables in EAF steelmaking. Due to their outstanding electrical conductivity and excellent high-temperature resistance, they play a critical role in ensuring efficient and stable furnace operation, thereby improving steel production capacity and product quality.

【EAF Steel】Weak Supply and Demand in the Steel Market, Northern EAF Production Cuts

Boosted by the futures market and rising raw material costs, this week China's domestic steel market ran slightly stronger with fluctuations. After price increases, end-user purchasing enthusiasm has improved, and market inventories continue to decline. As of November 27, the average rebar price in China was 3,200 RMB/ton, up 25 RMB from the previous weekend.

Raw Materials

This week, China's scrap steel market was stable with slight increases. Some steel mills proactively raised prices to replenish inventory. The average purchase price of electric-arc furnace scrap steel rose 8 RMB from last week to 2,120 RMB/ton (excluding tax). Both costs and profits of EAF steel mills increased.

Production

Statistics show that as of November 27, China's 135 EAF steel mills had a capacity utilization rate of 48.35%, up 0.21% from last week. Daily EAF steel production reached 316,900 tons, marking a rebound for two consecutive weeks, though the growth rate has clearly slowed.

With declining temperatures, there are signs of increasing production halts in northern EAF steel mills. Recently, EAF mill profits have improved significantly, and the cost gap with blast furnaces continues to narrow. However, due to weakening domestic steel demand and exports toward year-end, combined with inherent limitations of EAF steel products, the probability of sustained production growth remains low.

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