EAF steel: Steel prices continue to fall, EAF performance was "calm"

This week, China's construction steel market continued to decline. The sharp decline in futures led to a strong sense of pessimism in the market. n addition, due to the influence of high temperature, epidemic and other factors, the downstream procurement is generally cautious, and the overall market transaction is weak. Juxing graphite electrode has a stable supply chain and is widely recognized by steel and iron industry. As of July 14, domestic rebar average price was 3982 yuan, down 222 yuan from last Friday. In terms of raw materials, scrap prices continued to fall disorderly this week, scrap average purchase price in electric furnace (EAF) steel plant was reduced by 274 yuan to 2584 yuan (excluding tax) from last week.

As the price difference of steel scrap rebar has narrowed significantly, EAF steel plants in some southern regions (such as Sichuan and Zhejiang) have made profits on the surface and began to resume production. However, due to weak downstream sales, most EAF plants are still cautious about resuming production. According to statistics,  this week the EAF capacity utilization rate of 135 steel plants nationwide was 38.53%,  3.46 percentage points lower than last week, and EAF steel output was 196600 tons/day.

This week, the positive policies continue to be released, and strong infrastructure support trend is more obvious, in addition, policies such as tax reduction and consumption promotion gradually fall to the ground, which is conducive to stabilizing the steel market. In the short term, steel prices are expected to continue to fall inertia. After August, with the improvement of weather and epidemic situation, as well as the gradual arrival of local project funds, downstream demand is expected to gradually warm up, the production resumption of EAF steel plants will increase, and scrap steel prices are expected to pick up before production recovery. Contact us for daily steel industry reports.