[SMM survey] Will the production pace of building materials rolling lines be maintained when the "inflection point" of pig iron collides with the "ebb tide" of demand?

According to the SMM survey, the volume of maintenance at construction material steel mills increased slightly this week, with pig iron production peaking. Subsequently, there will be more maintenance at blast furnaces in steel mills, which will affect the production of construction materials. The impact from maintenance on construction materials was 1.1138 million mt, an increase of 28,700 mt WoW.

Source: SMM

From a fundamental perspective, on the demand side, the rainy season has increased in southern China in recent days, disrupting construction at downstream construction sites in some regions. Meanwhile, downstream demand from sectors such as automobiles and home appliances has been impacted to a certain extent by weaker consumer spending, resulting in generally lackluster steel demand. On the supply side, most blast furnaces that underwent maintenance earlier have resumed production. With pig iron production currently peaking, there is significant supply pressure. Overall, the fundamentals of the steel market indicate strong supply and weak demand, providing little support for steel prices. On the cost side, iron ore and coke prices have remained relatively firm, leading to a contraction in steel mill profits. According to the SMM survey, several steel mills have plans for blast furnace maintenance in the future. Some steel mills' blast furnace maintenance has affected the supply of raw materials for construction material rolling lines. Additionally, a few steel mills have postponed the start of their maintenance plans to mid-May due to relatively favorable profits and demand before the Labour Day holiday, resulting in a slight increase in the volume of maintenance at construction material steel mills this week.

Looking ahead, stimulated by the easing of Sino-US trade negotiations, spot market prices have surged. However, as the enthusiasm gradually cools, the market will return to fundamentals, with demand showing a gradual weakening trend and market confidence remaining insufficient. Currently, steel mills are maintaining their planned maintenance schedules. It is expected that the impact from maintenance on construction materials will be 1.125 million mt next week, an increase of 7,000 mt MoM from this week.

Source: SMM