[SMM survey] Poor tapping performance coupled with product variety adjustment led to a WoW decline in rebar supply in Central China

Operating Rate and Forecast of Construction Material Production Lines at Steel Mills in Central China

During the survey period (May 13-19), the capacity utilization rate of rebar rolling lines in Central China continued to decline; the operating rate and capacity utilization rate of wire rod production lines remained unchanged from the previous week.

Data source: SMM

During the survey period (May 13-19), the capacity utilization rate of rebar rolling lines in Central China continued to decline.

Specifically: In Hubei, some steel mills experienced poor iron tapping after blast furnace maintenance and resumed production, leading to coordinated production cuts in rebar rolling lines. In Henan, some steel mills shifted to round bar production due to strong orders and higher profits compared to rebar, alternating production lines and thus reducing rebar output. Additionally, electric furnace mills in the region faced difficulties in scrap collection, resulting in two days of production halts during the week. These combined factors led to a decrease in rebar capacity utilization and a reduction in supply. In terms of in-plant inventory, downstream demand was mainly driven by immediate needs, and production cuts by steel mills led to a continuous reduction in in-plant inventory.

It is expected that most steel mills in Central China will maintain their current production pace for rebar next week. Only steel mills in Hubei may experience intensified production cuts due to poor iron tapping, potentially leading to a slight decline in rebar production.

Data source: SMM

During the survey period (May 13-19), the operating rate and capacity utilization rate of wire rod production lines in Central China remained unchanged from the previous week, with steel mills maintaining their original production schedules. In terms of in-plant inventory, market demand was average, and inventory levels shifted from decreasing to increasing.

It is expected that the capacity utilization rate of wire rod production lines in Central China will increase next week, primarily due to the planned temporary resumption of a wire rod rolling line by a steel mill in Hubei over the weekend, which will bring a certain increase in output.

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