[SMM Survey] Divergence in Operating Conditions of Rolling Lines in Central China, Inventory Accumulates Significantly: What Will Be the Subsequent Changes?

Operating Rate and Forecast of Building Materials Production Lines at Steel Mills in Central China

During the survey period (April 29 - May 5), the operating rate of rebar rolling lines at steel mills in Central China decreased, while the capacity utilisation rate rose slightly; the capacity utilisation rate of wire rod rolling lines increased.

Data source: SMM

During the survey period (April 29 - May 5), the operating rate of rebar rolling lines in Central China decreased, while the capacity utilisation rate rose slightly.

Specifically, in the Hubei market, one additional electric furnace mill halted production due to difficulties in collecting steel scrap, and the rebar rolling line underwent synchronous maintenance, resulting in a slight decline in the operating rate. However, some steel mills in the region flexibly adjusted their production line plans, leading to an increase in the capacity utilisation rate of rebar. As a result, the overall supply of rebar increased. In terms of in-plant inventory, the purchasing pace of downstream traders slowed down during the Labour Day holiday, leading to a significant accumulation of inventory at steel mills.

It is expected that the rebar production in Central China will continue to decline next week, mainly due to the blast furnace maintenance plan of individual steel mills in the Hubei region starting from May 10, which will result in the synchronous shutdown of one rebar rolling line and a decrease in the capacity utilisation rate.

Data source: SMM

During the survey period (April 29 - May 5), the capacity utilisation rate of wire rod rolling lines in Central China rose slightly.

Specifically, in the Henan region, one additional wire rod rolling line resumed production on April 23. The actual number of operating days in this period was higher than in the previous period, leading to an increase in the capacity utilisation rate and driving an increase in the supply of wire rod. In terms of in-plant inventory, steel mills operated normally during the holiday, while the purchasing pace of downstream agents slowed down, resulting in an overall increase in in-plant inventory.

It is expected that steel mills in Central China will maintain their current production pace in the next period, with relatively stable wire rod production.

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