Posted on 19 Aug 2021
The steelmaking capacity utilization rate of China’s 71 independent electric-arc-furnace (EAF) steelmakers under Mysteel’s regular survey hovered at its five-month low, averaging 60.56% as of August 12 despite the on-week recovery of a tiny 0.76 percentage point after three weeks of declines, which was mainly due to the power supply constraints, according to market sources.
“Local governments in Southwest China such as Guangxi have gradually eased power rationing on local industrial enterprises since August 10, and some EAF mills in these areas have been able to ramp up production,” a Shanghai-based market watcher commented, and “the improvement in their steel margins have propelled them to do so too,” she added.
In the second week of August, China’s EAF steel mills saw their steel margin rise further thanks to the uptick in domestic steel prices while the softening in domestic steel scrap prices, Mysteel Global noted.
As of August 13, rebar margins among China’s 18 independent EAF mills rose for the sixth week by another Yuan 49/t on week to Yuan 443/t on average, as the nationalHRB400E 20mm dia rebar price grew by Yuan 11/tonne ($1.7/t) on week to Yuan 5,360/t, while the domestic steel scrap pricing index fell Yuan 10.7/t on week to Yuan 3,728.7/t including delivery, all according to Mysteel’s tracking with both the prices including the 13% VAT.
EAF steel mills in South and Central China, however, were still troubled with power supply shortage and forced to either halt their EAF operations during peak hours or just shut down the furnaces completely, Mysteel Global noted.
“Flooding in Henan in central China earlier on has spoilt some local power generating facilities, and affected regions, thus, have had to prioritize power supply for the civilian use,” she said.
Over August 6-12, daily scrap consumption among China’s 61 domestic mills surveyed by Mysteel, therefore, shrank for the seventh week by another 1.7% on week to 3,227.6 tonnes/day on average, Mysteel’s other survey showed.
Source:Mysteel Global
