Thin Profit Margins on Construction Steel, Divergent Performance Expected Next Week

During the survey period (August 18 – August 24), the operating rate of rebar rolling lines in the region remained flat, with capacity utilization declining slightly.

Specifically, production at individual steel mills in Hunan saw a slight decrease due to equipment failure and maintenance, while in Henan, certain mills diverted some hot metal to hot-rolled coil lines, resulting in a slight decline in rebar capacity utilization. On balance, supply saw a modest reduction during this period. On the mill inventory front, mill inventories shifted from accumulation to destocking, mainly driven by an active trading atmosphere under rising prices, which facilitated inventory drawdowns.

Looking ahead, rebar supply is expected to increase in the next period, primarily as Hunan steel mills resume production following rolling line maintenance and output returns to normal levels.

Data source: SMM

During the survey period (August 18 – August 24), both the operating rate and capacity utilization of wire rod lines in Central China remained stable.

During the survey period, profitability at steel mills showed no significant improvement, and enthusiasm for wire rod production remained low. Mills temporarily maintained their previous production pace, keeping overall supply stable. On the inventory front, individual regions were affected by rainfall, which slowed end-user procurement and led to a slight inventory accumulation.

Against the backdrop of sluggish demand for construction steel, wire rod production at steel mills is expected to remain stable in the next period.