China's EAF capacity utilization rate hits 3-month low
The capacity utilization rate of the 71 independent electric-arc-furnace (EAF) steelmakers across China under Mysteel’s tracking dropped to its three-month low ...
The capacity utilization rate of the 71 independent electric-arc-furnace (EAF) steelmakers across China under Mysteel's tracking dropped to its three-month low of 44.47% as of January 6. Behind the decline was the reduction in output among Chinese steelmakers due to thinning profits they earned.
The EAF capacity utilization rate was 0.27 percentage point lower on week or 16.51 percentage points lower on year, according to Myteel's database.
"Last week, more EAF makers have fallen into lossmaking, which forced them to halt production to avoid further losses," a Shanghai-based market watcher said.
Mysteel's survey found that profits of 18 surveyed EAF makers earning on rebar had lost Yuan 35/tonne ($5.5/t) on average as of January 6, down Yuan 42/t on week.
Chinese steel scrap prices have been hovering at a comparatively high level supported by the firm replenishment demand among steelmakers and the seasonal supply tightness. On the other hand, China's domestic steel prices have showed signs of stabilizing.
For example, Mysteel's steel scrap price increased by a large Yuan 62.4/t on week to a two-month high of Yuan 3,625.9/t on delivery as of January 10, while China's national price of HRB400 20mm dia rebar increased by just Yuan 19/t on week to Yuan 4,747/t, both including the 13% VAT.
Apart from EAF mills, those integrated steel mills consuming both steel scrap and iron ore in steelmaking have also been selective in raw materials, weighing the cost advantages of steel scrap against iron ore, Mysteel Global noted.
By the end of last week, the price advantage of steel scrap against molten ore at steel mills in East China's Jiangsu province hovered high at Yuan 346.7/t, while the price spread between steel scrap and rebar narrowed to Yuan 1,141.7/t, down Yuan 47.4/t on week, according to Mysteel's assessment.
~ Written by Lindsey Liu, liulingxian@mysteel.com
~ This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
