Posted on 22 Oct 2021
The steelmaking capacity utilization rate of China's 71 independent electric-arc-furnace (EAF) steelmakers under Mysteel's regular survey hovered low at 48.55% as of October 14, despite nudging up for the second week by a tiny 0.79 percentage point. Market sources blamed continuing power supply constraints for the lower run rate.
Local governments in East China such as that in Jiangsu province eased power rationing to local industrial enterprises from the beginning of last week, and some EAF mills in these areas have been able to ramp up production, a Shanghai-based market watcher commented. “The rather healthy steel margins they can enjoy also encouraged them to do so too,” she added.
As of October 15, the average rebar margin among the 18 independent EAF mills Mysteel tracks was at a relatively high level of Yuan 825/tonne ($128.7/t), according to Mysteel's assessment.
However, EAF steel mills in Northwest and Central China were still troubled by power supply shortages and were forced to halt their EAF operations during peak hours, Mysteel Global noted.
Besides the power shortages, the continuing tightness of scrap supplies also prevented EAF makers from ramping up production, Mysteel Global noted.
"Not only steel mills but scrap dealers, especially those in eastern and southern areas of China, also face electricity rationing, with the result that their slower rate of scrap collecting and processing has exacerbated the tight supplies currently," she explained. "Though some mills raised scrap buying prices to attract more deliveries, the volume they’re receiving daily can scarcely meet their requirements, let alone allow them to expand their production," she added.
In tandem, over October 8-15, scrap deliveries from traders to 61 Chinese blast-furnace and EAF mills monitored by Mysteel remained low at 2,772 tonnes/day, while their daily steel scrap consumption averaged 2,904 t/d, according to the database.
Source:Mysteel Global
