【SMM Research】When the "inflection point" of molten iron production meets the "ebb tide" of demand, can the production rhythm of construction steel rolling lines be sustained?

According to SMM research, the amount of maintenance at steel mills producing construction steel increased slightly this week, with molten iron production peaking. More blast furnace maintenance is expected at steel mills in the future, which will affect construction steel production. The maintenance impact on construction steel output is 1.1138 million tons, an increase of 28,700 tons from last week on a week-on-week basis.

On the fundamentals side, in terms of demand, the rainy season has increased in southern regions recently, hindering construction at downstream sites in some areas. Meanwhile, downstream demand from sectors such as automobiles and home appliances has been partially impacted by weakening consumption, resulting in moderate steel demand. On the supply side, most of the blast furnaces that were previously under maintenance have resumed production, and current molten iron production has reached its peak, putting significant pressure on supply. The overall fundamentals of steel show strong supply and weak demand, which hardly supports steel prices. On the cost side, iron ore and coke prices remain relatively strong, squeezing steel mills' profits. According to SMM research, many steel mills have blast furnace maintenance plans for the future. Maintenance of blast furnaces at some steel mills will affect the raw material supply for construction steel rolling lines. In addition, due to relatively good profits and demand before the May Day holiday, some steel mills have postponed the start time of their maintenance plans to mid-May, leading to a slight increase in this week's maintenance volume for construction steel.

Looking ahead, currently stimulated by news of the easing of Sino-US trade negotiations, spot market prices have risen sharply. As the heat gradually cools, the market will return to fundamentals, with demand showing a gradual weakening trend and market confidence still insufficient. At present, steel mills are maintaining their planned maintenance pace. It is expected that the maintenance impact on construction steel output next week will be 1.125 million tons, an increase of 7,000 tons from this week on a week-on-week basis.