【Electric Arc Furnace Steel】Slow Resumption of EAF Operations; Scrap Steel Firm...

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.

【Electric Arc Furnace Steel】Slow Resumption of EAF Operations; Scrap Steel Firm in Price but Weak in Trading

After the holiday, China's construction steel market has remained generally stable. Although some steel mills have shown willingness to hold firm on prices, most downstream construction sites have yet to resume operations, resulting in sluggish overall market transactions. As of February 26, in China, the average price of rebar stood at RMB 3,203/ton, unchanged from pre-holiday levels.

On the raw material side, steel mills mainly consumed existing inventories during the holiday period. Most scrap steel supply is not expected to fully return to the market until after the Lantern Festival (the 15th day of the first lunar month). Many EAF steel mills only resumed scrap procurement from the latter half of the week, leading to a market situation characterized by firm quotations but limited actual transactions.

This week, EAF steel mill operating rates have remained at low levels. Only a small number of independent EAF mills in southern China resumed production starting in the latter half of the week. According to statistics, as of February 26, the capacity utilization rate of 135 EAF steel mills in China was 5.42%, up 0.4 percentage points from the previous week, but still below the pre-holiday level.

It is expected that EAF steel mills in China will gradually resume production next week. However, given the currently low overall profit margins of steel mills, relatively stable blast furnace output during the long holiday, and ongoing inventory reduction pressure in the market, the short-term upside potential for EAF steel output remains limited.

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