Scrap-fed EAFs in Chinese Provinces Extend Production Halt

SEATTLE (Scrap Monster): The scrap-fed EAFs in China seem to be heavily impacted by the outbreak of coronavirus. The slowdown in collection and drop in demand have lowered the margins or even resulted in negative margins.

In accordance with the latest report published by the China Iron and Steel Association (CISA), the EAFs in many virus-affected provinces including Hubei, Sichuan, Chongqing, and Guangdong, which were closed for Lunar New Year holiday, have not yet restarted operations. Only 35% mills have restarted in the Zhejiang province. Meantime, almost 96% of the country’s major steelmakers and above two-thirds of the entire industry is operational, CISA added.

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The Chinese steel sector has been more or less immune to the effects of coronavisus outbreak. However, the resilient steel mill operations have led to soaring steel mill inventories. For instance, steel mill inventories as of early-February were 19 million tonnes, surging higher by almost 94% from beginning-2020.

Although the country’s transport sector has resumed operations, the activity levels continue to remain below normal levels. The Chinese ports are still facing ogistics hurdles for movement of steel and raw materials