【Electric Arc Furnaces】Survey of Production Situation in Independent Electric Arc Furnaces in China

In February 2024, statistics show the production situation of 87 independent electric arc furnace steel mills in China (of which 76 are enterprises producing construction steel), as follows:

1. The average operating rate of the 87 independent electric arc furnace steel mills in China is 35.61%, up by 27.69 percentage points compared to the previous month, and down by 33.28 percentage points year-on-year. Among them, the Central China region saw a slight rebound, while significant increases were observed in North China, East China, South China, Northwest China, and Southwest China, with the remaining regions remaining stable. Graphite electrode products can be widely used in arc furnace steelmaking.

2. The average capacity utilization rate of the 87 independent electric arc furnace steel mills in China is 29.11%, up by 25.01 percentage points compared to the previous month, and down by 28.82 percentage points year-on-year. Similar to the operating rate, there was a slight rebound in the Central China region, while significant increases were observed in North China, East China, South China, Northwest China, and Southwest China, with the remaining regions remaining stable.

3. The daily crude steel production of the 87 independent electric arc furnace steel mills in China increased by 609.53% compared to the previous month.

4. For the 76 construction independent electric arc furnace steel mills, the weekly output of rebar increased by 2431.30%, and the weekly output of wire rod increased by 4814.47%.

5. The profit situation of the 76 construction independent electric arc furnace steel mills in China is as follows: 21.05% of the steel mills made a small profit, 67.11% of the steel mills remained flat (partly due to production stoppages resulting in flat product profitability), and 11.84% of the steel mills incurred losses.

This week, the operating rate and capacity utilization rate of independent electric arc furnaces in China have increased significantly. According to statistics, 41 independent electric furnace plants in China have resumed production one after another. In terms of regions, the proportions of resumption of production are higher in the East China, South China, and Southwest China, and some electric furnace plants in North China and Northwest China have also resumed production according to the original plan, with only electric furnace plants in the Northeast region yet to resume production. In terms of the timing of resumption of production, steel mills mainly resumed production after the Lantern Festival, with some delay compared to the previous plan. In terms of production time, with the continuous decline in the finished product market recently and the high cost of scrap steel, the profit margin between rebar and scrap steel has continued to shrink, dropping below 1000 yuan/ton, with most operating at a small loss. Therefore, most steel mills choose to stagger production, concentrating production time between 8-16 hours, with only a few steel mills utilizing peak electricity for production. From the current relationship between scrap steel and finished products, steel mills that have resumed production are unlikely to increase production, and will maintain the status quo.

Looking at the resumption of production next week, it mainly involves steel mills in the East China, South China, and Central China regions, with production concentrated on March 1st. It is expected that the operating rate and capacity utilization rate of independent electric arc furnace plants will continue to rise next week. For more information on the electric arc furnace steel market, feel free to contact us.