High scrap prices squeeze EAF mill profit margins

The climb in steel scrap prices is placing more pressure on China’s domestic electric arc furnace (EAF) steelmakers, squeezing their profit margins at a time when prices of EAF-made rebar have fallen to around Yuan 30/tonne ($4.2/t) on average, Mysteel Global has learned.

“We have been at break-even for a while,” an official with an independent EAF steel mill from Southwest China’s Sichuan province complained, adding that his firm has to pay more for scrap feeds to maintain normal production. “If our profit margins show no revival in the near term, we