【Electric Arc Furnace Steel】The "Lithium Carbonate" in the Black Industry

This week, the domestic construction steel market in China experienced an initial decline followed by a rebound. The trading atmosphere closely followed the fluctuations in the futures market. In the first half of the week, traders mainly focused on hedging through shipments and cashing out. The trading situation improved in the second half of the week. As of December 7th, the average price of domestic rebar was 4012 yuan, an increase of 32 yuan compared to the previous weekend.

Regarding raw materials, the price of scrap steel in China fluctuated slightly this week. The average purchase price of scrap steel (electric arc furnace material) at steel mills increased by 6 yuan to 2592 yuan (without invoice) compared to the previous week. Profits and production at electric arc furnace steel mills continued to rise. With the reduction in the supply of scrap steel in winter, the expected purchasing cost is likely to increase later, more market news of semi-graphitized petroleum coke.

According to statistics, as of December 7th, the capacity utilization rate of 135 electric arc furnace steel mills in China was 52.36%, an increase of 1.71% compared to the previous month. The daily production of electric arc furnace steel reached 310,100 tons, rising for nine consecutive weeks. Several new electric arc furnaces in Jiangsu, such as Longteng and Huaigang, have been put into operation or are about to start production.

It is worth noting that this week, the State Council issued the "Action Plan for Continuous Improvement of Air Quality," emphasizing the resolute containment of blindly launching projects with high energy consumption, high emissions, and low levels. It also encourages the orderly transformation of blast furnace converters for long-process steelmaking into short-process steelmaking with electric arc furnaces. By 2025, the proportion of short-process steel production is expected to reach 15%. Considering that the current share of electric arc furnace steel in China is less than 10%, and the fundamentals of iron ore and coke are still relatively strong in 2024, it is expected that there will be a significant increase in the development efforts for electric arc furnace steelmaking in various regions in the later period. Contact us to learn about the latest market trend analysis of EAF steel.