【EAF Steel】 Trillion National Bonds Bring Expectations, 

Electric Furnace Production Sees Third Consecutive Growth

This week, China domestic construction steel prices experienced slight fluctuations, and in the latter half of the week, the news of issuing an additional 1 trillion RMB in national bonds had an impact, which once again influenced market sentiment in the futures market, causing a minor increase in spot prices. As of October 26th, the average price of domestic rebar was 3,763 RMB, up 22 RMB from the previous week.

Regarding raw materials, the supply of domestic scrap steel has steadily increased this week. Both the volume of scrap steel deliveries to steel mills and demand for it have risen, causing the average purchase price of scrap steel (for electric furnace use) to decrease by 33 RMB to 2,479 RMB (excluding taxes) compared to the previous week, more about price info. of Graphitized Petroleum Coke (as a Carburizer for EAF Steelmaking). However, in the latter half of the week, as futures market gains once again drove up steel prices, scrap steel companies began to hold onto their prices and showed reluctance to sell. 

Due to the wait-and-see attitude in the scrap steel market in the latter half of the week, its performance lagged behind that of construction steel. Electric furnace steel mills continued to see rising profits, with many electric furnace steel mills resuming daily production times of around 16 hours. Electric furnace steel production has seen a slight increase for three consecutive weeks. As of October 26th, the capacity utilization rate of 135 electric furnace steel mills nationwide reached 41.79%, an increase of 1.9% compared to the previous month, and electric furnace steel production reached 247,500 tons per day.

Recently, positive developments in the financial market have provided some uplift to the steel market. While it remains to be seen when and how this will translate to downstream markets, at the very least, current market sentiment has improved. On the other hand, the iron and coke inventory in steel mills is still at a low level, and it is expected to remain strong until the Spring Festival. Some small and medium-sized long-process steel mills face significant cost pressures, which may lead to further production cutbacks, giving electric furnace steel mills valuable breathing space. Follow us to receive more information on the future of Electric Arc Furnace Steel.