[SMM Analysis] Construction Steel Demand Pulled Back Seasonally This Period

Supply side, some individual EAF steel mills completed electric furnace technological transformation and resumed production as planned, leading to a slight WoW increase in the national electric furnace overall operating rate. Some blast furnace steel mills adjusted their production structure, directing more hot metal toward other products and reducing construction steel rolling line operating loads, causing total construction steel production to shift from growth to decline this period. Demand side, the fifth round of coke price increases landed and the sixth round was proposed, but market expectations had already been priced in. The cost-driven upward push on construction steel was limited. Moreover, the market was gradually entering the traditional demand off-season, with weak speculative sentiment, and end-user purchases were mainly rigid demand at low prices.

According to SMM statistics, both mill inventory and social inventory destocked to varying degrees. Total construction steel inventory was 7.7978 million mt, down 50,100 mt WoW, or -0.64% WoW, with the destocking pace slowing down.