Electric furnace steel: Steel market transactions are sluggish, electric furnace profits turn to decline

This week, the domestic construction steel market continued to experience slight fluctuations. Downstream demand is still dominated by rigid purchases, traders are cautious in sourcing, and inventory clearance in the market remains slow, thereby exerting some pressure on prices. As of April 2, the average price of domestic rebar was 3,224 yuan, down 12 yuan from the end of last week.

In terms of raw materials, the scrap steel market was stable with a slight decline this week. With weaker steel and iron ore prices, some steel mills also lowered their scrap steel purchase prices, and some suppliers accelerated shipments, resulting in a continuous improvement in steel mills’ scrap steel arrivals. This week, the loss at electric arc furnace (EAF) steel mills slightly widened, but it still remains within a neutral range, and EAF steel production continues to climb.

According to ICC Xinluo Information statistics, as of April 2, the capacity utilization rate of 135 EAF steel mills nationwide was 46.34%, up 4.08% from last week, and the daily average production of EAF steel rose to 304,900 tons.

Currently, demand in the steel market is generally ordinary, and prices mainly fluctuate around the Middle East situation, which has a particularly significant impact on bulk commodities such as iron ore and coking coal, thereby affecting the pace of production increases at EAF steel mills. Broadly speaking, some EAF steel mills in certain regions of the country are marginally profitable at present, but since the share of construction steel is expected to continue declining in 2026, the sales pressure on EAF steel mills remains.