Steel production lines in central China gradually resumed [SMM Survey]

During the survey period (March 26-April 1), the total output of construction steel at central China steel mills increased in the week, and the inventory of wire rod in the plant rose. Recently, some steel blast furnace plants resold steel billets; it is expected that the total volume of building materials of central China steel mills will increase in the next period.

During the survey period (March 26-March 1), rebar rolling line production in central China rose. Specifically: the rolling lines of steel mills in the three provinces undergoing preliminary maintenance resumed production this week, and the overall operating rate increased significantly. Among them, some steel mills in Henan recently switched to increasing strip steel production, and rebar production lines have been suspended in this period. Secondly, some steel mills in Hubei and Henan reduced the production of rolling lines and resold steel billets. Although more rolling lines resumed production in this period, the output didn’t increase significantly. In terms of in-plant inventory, affected by the downturn in the market this period, agents' delivery has slowed down, and in-plant inventory decline has slowed down.

It is expected that rebar production in central China may continue to increase next week. The steel plants that resume production in this period will have more production days in the next period than this period. Production will continue to rebound, but it will be difficult to return to normal levels in the short term.

During the survey period (March 26-April 1), the operating rate of wire rod declined in central China, but capacity utilisation rate rose slightly. Specifically: in this period, a steel plant in Henan added wire rod maintenance, and the surplus pig iron was transferred to increase the production of steel billets. The efficiency of steel billet shipments was moderate, resulting in a decline in the wire rod operating rate of steel plants in this period; but Hunan steel plants resumed production, and output has picked up. In terms of in-plant inventory, the recent performance of wire rod transactions were poor, and wire rod inventories accumulated in some steel mills.

It is expected that the overall output of wire rod in central China may inch lower next week, mainly due to the maintenance at steel mills in Henan.