Posted on 02 Feb 2024
Most electric-arc-furnace (EAF) steelmakers across China have started to prepare for their spring holidays to celebrate Chinese New Year that will arrive in mid-February, with many mills having already stopped production in late January, the results of Mysteel's latest survey showed.
Among the 95 independent EAF mills Mysteel recently canvassed, around 44% had switched off their furnaces and started maintenance work during January 20-31, with another 7% planning to stop production during February 1-9. The survey found that these mills will not resume production until after China's Lantern Festival on February 24 – usually recognized as the last day of the CNY festivities.
However, compared with the CNY periods of previous years, this year these mills had commenced their holidays much later because they could still earn some money on steel sales when, in previous years, they were suffering severe losses, Mysteel Global noted.
Among the 95 steelmakers under Mysteel's survey, around 67% of the mills had enjoyed positive margins as of mid-January.
Meanwhile, as of January 31, the 18 operating EAF mills under Mysteel's daily tracking managed to earn an average profit of Yuan 48/t on sales of construction steel products, with their profits being even larger if they confined their production to off-peak times for electricity when they could cut their costs.
As a result, domestic EAF steelmakers generally decided to keep operating a few days more in the runup to the holiday period, Mysteel Global learned.
For example, according to the holiday plans released by the 25 EAF mills in South China's Guangdong province covered in Mysteel's survey, they intended to halt their operations for 30 days on average for the CNY this year, 12 days shorter than in the same New Year period last year, Mysteel calculated.
The production halt among these sampled 25 mills will lead to a reduction of 1.8 million tonnes of their total crude steel production, according to Mysteel's assessment.
Source:Mysteel Global
