【EAF Steel】Profits Soar by 200, Production Sees Six Consecutive Increases

With the gradual release of macroeconomic benefits and the rise in the futures market, the spot prices of China domestic construction steel continued to rise this week, restoring market confidence. As of November 16th, the average price of domestic rebar was 3976 yuan, up 73 yuan from the previous week.

In terms of raw materials, the scrap steel prices in China remained stable with a slight increase this week. The average purchase price of steel mills for scrap steel (electric arc furnace material) increased by 20 yuan to 2559 yuan (without tax) from the previous week, and the price gap between scrap and rebar further widened. Scrap suppliers have a clear intention to hold prices, and the increase in steel mill arrivals is slow.

At present, the profits of some electric arc furnace (EAF) steel mills have exceeded 200 yuan. Many southern manufacturers have increased production time to 16-21 hours. The production of electric arc furnace steel has increased for six consecutive weeks, reaching the highest level since May. According to statistics, as of November 16th, the capacity utilization rate of 135 electric arc furnace steel mills nationwide was 46.24%, an increase of 2.44% compared to the previous month, and the production reached 273,800 tons/day.

With the gradual implementation of favorable policies, the situation in the steel market has improved this week, and the trend of construction steel is stronger than that of plates. This has driven the overall rebound in profits and production of electric arc furnace steel mills, and even converter steel has begun to turn losses into profits. From the current situation, the tight balance in the petroleum coke market will continue, and the cost of pig iron will remain strong. It is expected that before the end of the year, there is still room for the rebound in electric arc furnace steel production.