Graphite electrodes are vital consumables in electric arc furnace (EAF) steelmaking, mainly used for arc heating. With superior electrical conductivity and high-temperature resistance, they are key to improving both the output and quality of EAF steel.

【Electric Arc Furnace (EAF) Steel】Scrap and Electrode Prices Fall Together, EAF Mills Await Policy Support

Under the current situation of "high supply and weak expectations," China's domestic construction steel market continued to weaken this week. Downstream inquiries remained limited, and merchants generally lacked confidence. As of May 29, the average price of rebar in China was RMB 3,140/ton, down RMB 59 from last week.

On the raw materials side, domestic scrap steel prices continued to decline slightly this week. The average scrap purchase price for EAF steel mills dropped by RMB 40 to RMB 2,123/ton (excluding tax). Graphite electrode prices continued to fall by around RMB 1,000, further widening the losses for EAF steel producers. Some southern mills have shifted to nighttime electricity usage to cut costs. According to statistics from Xinluo Information, as of May 29, the capacity utilization rate of 135 EAF steel plants in China was 52.42%, down 0.17% from last week. Daily EAF steel output fell to 328,100 tons, marking a decline for the second consecutive week.

In June, some downstream industries such as automobiles and home appliances may push for mid-year production increases, and infrastructure project progress is also expected to accelerate. However, the real estate market remains unlikely to improve significantly in the short term. It is expected that flat steel products will perform better than long products, and pressure on EAF steel mills will remain high.

Although time-of-use electricity pricing policies in some southern regions may be adjusted in June to slightly lower power costs for EAF steel mills, without strong policy support in the future, achieving the 2025 target of a 15% EAF steel ratio will be very difficult.

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