Steel price is expected to recover before holiday, EAF steel is hard to escape "background plate"

Driven by the rising futures market, China's steel spot market sentiment improved this week. Driven by the recent rise in raw materials and fuel, the rebar price has gradually increased. As of December 16, the average price in China was 4038 yuan/ton, 156 yuan higher than last weekend. Learn about graphite electrode products used in EAF steelmaking.

This week, China's scrap steel market continued to rise, and the winter stock of steel plants gradually increased. However, the average purchase price was only 58 yuan higher than last week, to 2702 yuan/ton. Suppliers are reluctant to cut price, and the steel plants' receipt rate is growing slowly.

Under the comprehensive influence of continuous losses, sales pressure, energy consumption control and other factors, nearly half of the independent EAF steel plants in Fujian, Guangdong and Anhui stopped production this week, and a few EAF steel plants in Jiangsu and Sichuan also stopped production for maintenance. According to statistics, the EAF steel capacity utilization rate of China's 135 steel plants was 38.2% this week, down 0.51% from last week, and the output was 214200 tons/day.

At present, the fundamentals of the steel market have changed within a narrow range. In terms of traders, most of them are cautious and optimistic. They believe that there is a great possibility that steel prices will continue to strengthen before the Spring Festival, but meanwhile they are not optimistic about the prospects of demand beyond infrastructure. Futures hedging operations for winter reserves are also conducive to the formation of price fluctuations, and after March next year, the market will face callback pressure. With the increasing difficulty of purchasing scrap steel in winter, EAF steel plants are expected to stop production again in late December, making it difficult for them to get rid of the "background plate" fate of this round steel price rebound. For more reports on EAF production before the Spring Festival, welcome to contact us.