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As of 9 September, the capacity utilisation rate of many of China’s independent electric arc furnace (EAF) steel mills recovered after a two-week decline, rising 2.74 percentage points to 63.14%, as some EAF mills in eastern and southwestern China returned to production after routine maintenance.
Meanwhile, environmental protection inspections initiated by the country’s Ministry of Ecology and Environment are still ongoing in South China’s Guangdong, affecting local EAF operations, and some EAF mills in Southwest China’s Guangxi lowered their output on local energy rationing, but the declines were offset by more ramp-ups last week among some other mills in other areas, such as in East China’s Jiangsu.
In the week of 4-10 September, some local authorities in southwestern China eased energy rationing for local industrial firms and some EAF mills were able to ramp up production to maximise margins.
Meanwhile, China’s steel mills are eager to increase production as much as they are allowed, as steel profit margins have increased for both EAF mills and blast furnaces due to higher domestic steel prices and lower steelmaking raw materials, particularly iron ore, and demand is expected to increase soon in the traditionally robust steel selling season, as well as ahead of the public holidays of 20-21 September and 1-7 October.
