Rebar Coil Production Diverges, Wire Rod Supply Sharply Declines

During the survey period (July 21-July 27), steel mills in the region largely maintained their previous production pace, with rolling line operating rates and capacity utilization rates both remaining flat.

On the mill inventory side, inventories saw some growth during this period, mainly concentrated in Hunan and Henan. This was primarily due to agents' low willingness to purchase amid weak futures.

Next period, mills have no plans for production changes, and rebar supply is expected to remain stable.

During the survey period (July 21 – July 27), both the operating rate and capacity utilization rate of wire rod in Central China declined.

Specifically, the changes this period were concentrated in Hubei. On the one hand, some mills' wire rod production had met earlier order demand, and considering limited profitability of producing wire rod, they had no plan to continue production, leading to a lower rolling line capacity utilization rate. On the other hand, some steel mills in the region chose to halt two wire rod rolling lines due to poor shipments, causing a simultaneous decline in operating rate. Under the combined effects, wire rod supply decreased this period. On the inventory front, steel mill inventories in the region diverged slightly this period. In Hubei, mill inventories edged down due to reduced supply from steel mills. In Hunan and Henan, downstream purchasing enthusiasm was moderate, and steel mill shipments declined, resulting in a slight inventory accumulation.

It is expected that wire rod supply will continue to decline next period, mainly because some steel mills in Hubei halted wire rod rolling lines this week, resulting in fewer operating days next period than this period, which will lower the rolling line capacity utilization rate.