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Steel works overhaul in June: it is difficult to ride down the supply of building materials
Jun 4,2019 19:38CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

According to SMM statistics, as of today, it is estimated that the production of building materials affected by the maintenance of steel mills in June was 218000 tons, down 177800 tons from May. On the one hand, according to SMM research, at present, the profit of long process steel mills is still about 400 yuan / ton, and even some steel mills reach 600 yuan to 700 yuan / ton, so there are still some equipment in the state of maintenance because some steel mills have not yet completed the maintenance. This month, only five steel mills have new maintenance plans in June, and most of them are still in full production. On the other hand, most steel mills have resumed production of equipment overhauled in April and May. In addition, due to the loosening of the production restriction policy in Tangshan, some steel mills have also reported plans to resume production of blast furnaces, adding another fire to the supply in June. In addition, although the recent profits have been compressed, the feedback profits of some electric arc furnace steel mills are still about 50 yuan per ton. At present, there is no production reduction or maintenance plan, so overall, the supply of building materials will continue to remain high in June. Therefore, in the case of seasonal interference in demand, the trend of weak price volatility has not changed.

According to SMM statistics, since late April, under the background of the continuous brewing contradiction between supply and demand, the spot price of building materials has been in a weak state, and the prices have declined in all parts of the country, but there are some differences between regions, among which East and Southwest China have the biggest decline. Basically in 200 to 280 yuan / ton, the actual transaction price decline may be even more "spectacular."

SMM survey shows that the northern steel mills generally feedback that the rigid demand toughness of building materials is still there, the plant warehouse is also maintained at the conventional level, and the demand release is not obviously affected by seasonal interference. However, the southern market reflects that since the official entry into the "Meiyu" season, the construction process of the construction site has been difficult to push forward, and the terminal demand has been suppressed. At present, the feedback from some steel mills has obviously accumulated compared with the previous period, and the market mentality is more pessimistic. However, as prices have fallen to low, the rate of decline is expected to converge later.

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