As of September 9, the capacity utilization rate of China’s 71 independent electric-arc-furnace (EAF) steelmakers under Mysteel’s survey recovered from two weeks of declines, up 2.74 percentage points to 63.14%, as some EAF mills East and Southwest China had been back to production after their routine maintenance.
Meanwhile, environmental protection inspections initiated by the country’s Ministry of Ecology and Environment is still ongoing in South China’s Guangdong, affecting local EAF operations, and some EAF mills in Guangxi of Southwest China had lowered their production on the local power rationing, as reported, but the declines had been made up by more ramp-ups last week among some other mills in other areas such as in Jiangsu of East China, Mysteel Global noted.
Over the week of September 4-10, some local authorities in Southwest China eased power rationing on local industrial enterprises, and some local EAF mills, thus, were able to raise their output to maximize the higher steel margins, according to Mysteel’s surveys.
Meanwhile, Chinese steel mills are eager to step up output as much as they are allowed as steel profit margins have been rising for both EAF and blast-furnace steel mills with higher domestic steel prices while declines in steelmaking raw materials with iron ore in particular, and demand is expected to pick up soon in the traditional robust season for steel sales as well as ahead of the public holidays over September 20-21 and October 1-7.
As of September 10, China’s national price of HRB400E 20mm dia rebar assessed by Mysteel, for example, increased by Yuan 168/tonne ($26/t) on week to Yuan 5,525/t and including the 13% VAT, or a new high since May 20, and rebar margins among China’s 18 independent EAF mills under Mysteel’s survey averaged Yuan 422/t over September 3-10, or up Yuan 85/t on the week.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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