According to a recent survey, the majority of electric arc furnace (EAF) steel producers in China have begun preparations for the upcoming Chinese New Year celebrations in mid-February, with many factories shutting down production at the end of January. The survey of 95 independent EAF facilities revealed that around 44% had already closed their furnaces for maintenance between January 20-31, while another 7% planned to halt production between February 1-9. These factories are expected to remain inactive until the Lantern Festival on February 24, often considered the last day of the Chinese New Year festivities.
However, compared to previous years, these facilities started their holidays later this year, as they could still make some profit from steel sales, unlike the serious losses incurred in previous years. According to the survey results, approximately 67% of the participating steel producers were operating with a positive margin by mid-January.
As of January 31, 18 EAF facilities under daily monitoring by Mysteel achieved an average profit of 48 Yuan per ton from the sale of construction steel products. As the holiday season approaches, local EAF steel producers typically decide to continue working for a few more days.
The 25 EAF facilities surveyed, located in Guangdong province, plan to shut down operations for an average of 30 days during the Chinese New Year, representing a shorter duration compared to the previous year by 12 days. According to the assessment, the production stoppage of these 25 facilities will lead to a total decrease of 1.8 million tons in crude steel production.
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