Maintenance impact on long steel production to deepen in April

SHANGHAI, Apr 8 (SMM) – Production of long steel—rebar and wire rods—in China to be affected by maintenance this month is estimated to increase from March, showed an SMM survey.

The resultant production reduction, however, would not be big enough to offset increase generated from shifts from flats and higher operating rates at electric arc furnace (EAF) mills, pointing to greater long steel supply pressure in April.

About 730,800 mt of long steel production in China is expected to be affected by maintenance in April, up 97,200 mt from that in March, according to the survey SMM conducted as of April 7.

Around 53% of the maintenance and more than 20% is occurring in east and north China, respectively, where inventory pressure is heavy.

SMM data showed that social inventories of long steel in east and north China as of April 2 were both nearly twice as high as levels seen in the same period last year.

With hot-rolled coil (HRC) continuing to underperform rebar, profits on rebar are now 200-300 yuan/mt higher than those on HRC, which has triggered production switching from flats to longs at some mills.