Electric-arc-furnace (EAF) mills producing construction steel increased activity during the October 7–13 survey period, while improved scrap availability in parts of China helped some plants restart or extend operating hours. Shanghai Metals Market (SMM) measured the operating rate of 50 nationwide mills at 37.5%, up 2.0 percentage points week on week.
What changed in the latest EAF survey
SMM’s October 13, 2026 analysis covers 50 EAF mills nationwide that primarily produce construction steel. The survey records a modest but broad improvement in operating activity, output and capacity utilization compared with the previous period.
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| Measure | Current result | Change from previous period | What it measures |
|---|---|---|---|
| Operating rate | 37.5% | Up 2.0 percentage points week on week | The share of surveyed mills operating |
| Capacity utilization | 38.04% | Up 2.24 percentage points | Use of available production capacity |
| Average daily construction-steel output | 84,700 tonnes | Up 5,000 tonnes | Average output per day across the surveyed cohort |
These are SMM survey figures, not a complete census of every EAF producer. The published analysis does not describe detailed sampling or weighting methods, so the percentages should be read as an indicator for this specific 50-mill group. Operating rate, capacity utilization and tonnage are different measures and should not be treated as interchangeable.
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South China: blast-furnace purchasing eased
In South China, SMM links easier scrap sourcing for EAF mills to changes at blast-furnace (BF) mills. Improved hot-metal cost-effectiveness encouraged BF producers to scale back scrap procurement. That reduction in competing demand made scrap more available to EAF operators, some of which slightly extended operating hours as profitability showed signs of improvement.
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East China: profitable mills restarted
Per-tonne EAF profitability in East China remained above break-even during the survey period. SMM reports that some mills resumed EAF production, contributing to the regional and national increase in operating activity.
Central and Southwest China: mostly steady
Production in Central and Southwest China was largely unchanged from the prior period. The national rise therefore reflects a combination of restarts and longer runs in some areas rather than a uniform acceleration across every region.
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What the figures mean for construction-steel supply
The 5,000-tonne increase in average daily output indicates that the operating-rate improvement translated into additional construction-steel production within the surveyed mills. Capacity utilization rose by 2.24 percentage points to 38.04%, showing that the active plants used more of their available capacity as well as increasing the number of mills running.
Even after the increase, the reported operating rate and capacity utilization remain below half of the surveyed cohort’s potential. The data therefore describe a partial recovery in EAF activity, not a return to full utilization. Scrap availability and plant-level margins remain important constraints on how far production can rise.
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Near-term price and production outlook
SMM does not identify a strong driver for construction-steel fundamentals in the short term. Its assessment is that prices may not move decisively in either direction. For EAF producers, profitability is expected to fluctuate within a narrow range rather than improve in a sustained straight line.
Because margins are still sensitive to power and raw-material costs, SMM expects producers to maintain broadly similar off-peak, or valley-power, production schedules. EAF mills commonly use lower-cost electricity periods to protect margins; the analysis points to continuation of that operating pattern rather than a large shift to round-the-clock production.
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What to monitor next
- Scrap purchasing by BF mills: Continued reductions could leave more material available to EAF operators, while renewed BF demand could tighten sourcing again.
- EAF break-even margins: East China restarts and South China operating-hour extensions depend on profitability staying above, or close to, break-even.
- Power-price spreads: Changes in off-peak and valley-period electricity costs will affect whether mills can maintain current schedules.
- Regional divergence: Central and Southwest production was steady in this survey; a future national increase will be more durable if those regions also begin to rise.
- Output versus utilization: Tracking all three SMM measures prevents a higher operating rate from being mistaken for a proportionate increase in total steel supply.
Bottom line for construction markets
The October 7–13 data show a measured EAF recovery: operating rate reached 37.5%, capacity utilization 38.04%, and average daily construction-steel output 84,700 tonnes. Easier scrap procurement, especially where BF mills bought less scrap, helped some EAF plants restart or run longer. SMM nevertheless expects limited near-term price direction and continued reliance on off-peak power, so the increase is best viewed as a modest supply improvement rather than a decisive change in the construction-steel cycle.
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