FOCUS: Rising EAF production in China unlikely to reduce billet imports

China’s electric-arc furnace (EAF) mills have gradually raised their production rates in the past three weeks following stronger demand for steel products.

But this higher output is unlikely to lower billet imports into the country, according to market sources. They expect this trade flow to persist as long as the arbitrage window stays open.
Production rates for EAFs - which largely produce long steel products - are easier to adjust than those for blast furnaces. And although the latter also produces long steel, any change in the production rates for EAFs have a significant effect on supply in the market, according to industry analysts.
EAFs account for about a third of long steel products produced in China while BFs account for the remainder.
While long steel products in China are largely produced directly by domestic steelmakers or re-rollers that buy billet from their compatriots, the emergence of lower prices for the semi-finished product from time to time results in imports of it into the country growing.
Slow rise

EAF mills gradually raised their production...

Published

Vlada Novokreshchenova

Jessica Zong

Lee Ken Kiat

March 26, 2020

09:30 GMT

Shanghai, Singapore, Dnepr