en.Wedoany.com Reported - Mysteel's latest survey shows that production at China's electric arc furnace (EAF) steel mills continued to expand over the past week, with some mills resuming operations after completing maintenance.
During the period from May 15 to 21, the average capacity utilization rate of the 94 independent EAF steel mills monitored by Mysteel rose for the second consecutive week, increasing by 1.3 percentage points week-on-week to 62.1%. Over the same period, the average operating rate increased by 2.2 percentage points week-on-week, reaching 75.2%.
According to Mysteel Global, the growth in production at small mills accelerated over the past week, as four mills in the sample restarted idle EAFs after maintenance shutdowns, while other mills did not schedule any maintenance.
The survey results indicate that this led to an increase in daily steel output of approximately 5,600 tonnes among the sampled mills. However, another survey shows that profit margins at these mills narrowed rapidly due to the recent decline in steel prices.
Taking May 21 as an example, Mysteel assessed the national spot price of HRB400E 20mm diameter rebar at 3,435 yuan/tonne (including 13% VAT), down 1.7% week-on-week, equivalent to $507.8/tonne.
On the same day, the 76 independent EAF steel mills tracked by Mysteel nationwide recorded an average loss of 9 yuan per tonne on rebar sales, compared to an average profit of 17 yuan per tonne a week earlier.
Most small mills can still make a profit on products produced during off-peak hours (when electricity costs are lower). However, the survey shows that their production enthusiasm may weaken due to thin margins.
Mysteel's survey indicates that in the coming week, a small number of EAF steel mills in the southwestern region will resume production after completing equipment maintenance. The results suggest that, although the growth rate is slowing, the overall operating rate of domestic small mills is expected to continue rising.
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