Operating Rate Declined for Three Consecutive Weeks: When Will the Electric Furnace Mills’ Winter Thaw?
- Nov 06, 2025, at 9:30 am
- SMM
As of November 4, the operating rate of 50 steel mills specializing in construction materials nationwide stood at 35.72%, down 1.6% WoW; capacity utilization rate was 38.01%, down 1.64% WoW; daily average production of construction materials was 84,600 mt, down 3,700 mt WoW.
In east China, the electric furnace operating rate was 43.7%, down 0.3% WoW. Operating hours among regional mills varied: one mill cut production due to equipment failure, while another increased operating hours slightly following adjustments to critical peak electricity periods. In south China, the operating rate held steady at 45.2% WoW. Favorable weather supported operations, downstream demand increased slightly, and mill profitability improved modestly, though most remained in the loss zone and maintained previous production pace. In central China, the operating rate dropped 6.4% WoW to 18.6%. Profitability changed little for most mills, with many maintaining earlier operating levels; a few mills suspended production for maintenance due to persistent losses, with resumption timelines pending. In south-west China, the operating rate fell 1.8% WoW to 28.3%. Adjustments to electricity pricing policies in Sichuan raised production costs, prompting three mills in the region to reduce operating hours in response to cost pressure.
Overall, the traditional peak demand season for steel has passed. After the macro sentiment-driven rally, fundamental pressures on steel have intensified. In the short term, electric furnace mills still face dual challenges of losses and difficulty procuring steel scrap. However, with two mills having clear production resumption plans next week, the national electric furnace operating rate is expected to increase slightly.
