An electric arc furnace with a liquid steel capacity of 30 t was analyzed using the second law of thermodynamics. To carry out the exergy analysis, materials and energies entering and exiting the electric arc furnace were determined. The materials included several types of scrap, cokes, fluxes, oxygen, liquid steel, stack gases, and dust. Electrical and exothermic chemical energies of these materials were considered. Energies of the materials leaving the furnace, including liquid steel, slag, stack gases, and dust, were determined, as were the chemical reactions and exergies entering and leaving the electric arc furnace. Exergy efficiency and lost exergy were calculated. It was found that 42.6% of exergy is lost because of the chemical reactions, heat transfer, and other reasons. The overall exergy efficiency of the entire system was found to be 46%.