[SMM Analysis] Weak Demand for Construction Steel During Off-Season

Published: Aug 6, 2026 17:22

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According to SMM statistics, mill inventory and social inventory continued to diverge this period. Steel mill production declined, and mill inventory still saw a slight destocking, while social inventory continued to build up, though the pace of inventory buildup slowed. Total construction steel inventory stood at 8.4788 million mt, up 0.06% MoM, an increase of 5,400 mt.

Supply side, the third round of coking coal and coke price cuts took effect. The cost side saw some concessions, but spot prices fell more sharply than raw material costs, leaving steel mill production margins still in loss-making territory. Some blast furnace steel mills continued to schedule rolling line maintenance, while EAF steel mills either halted production or reduced operating rates, leading to an overall decline in production. Demand side, performance varied by region. East China saw a phased improvement in demand, but the central and northern markets were affected by rain, resulting in weaker demand release. Overall, demand remained at weak off-season levels. According to SMM statistics, mill inventory and social inventory continued to diverge this period. Steel mill production declined, and mill inventory still saw a slight destocking, while social inventory continued to build up, though the pace of inventory buildup slowed. Total construction steel inventory stood at 8.4788 million mt, up 0.06% MoM, an increase of 5,400 mt.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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