[SMM Survey] Rebar and Wire Rod Production in Central China Declines, Will Steel Mills Collectively Cut Production?

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

During the survey period (June 3 - June 9), both the operating rate and capacity utilisation rate of rebar rolling lines at steel mills in Central China declined, as did the capacity utilisation rate of wire rod rolling lines.

Source: SMM

During the survey period (June 3 - June 9), the capacity utilisation rate of rebar rolling lines in Central China decreased.

Specifically, individual steel mills in Hubei had good order-taking for billets and chose to halt one rebar rolling line this week to focus on billet production. Meanwhile, some steel mills in Henan shifted their capacity from rebar to plate and strip due to better profits from specialty steel products, leading to a significant reduction in rebar supply in the region. In terms of in-plant inventory, there was little change in direct supply from steel mills, and with reduced supply, in-plant inventory declined slightly.

It is expected that the capacity utilisation rate of rebar in Central China will increase next week, mainly due to the planned resumption of rebar rolling lines at one steel mill each in Hubei and Henan, which will drive up the capacity utilisation rate and overall production.

Source: SMM

During the survey period (June 3 - June 9), the weekly production of wire rod in Central China declined significantly MoM.

This was mainly due to higher profits and good order-taking for specialty steel products such as strip steel and high-quality special steel at some steel mills in Henan, prompting them to adjust their production plans and leading to a significant drop in the overall supply of wire rod. In terms of in-plant inventory, affected by the significant reduction in production at steel mills, the inventory of coiled rebar at steel mills also decreased.

It is expected that most steel mills in Central China will maintain their current production pace for wire rod next week, with only a few steel mills operating fewer days than the previous period, resulting in a slight decline in capacity utilisation rate and overall production.

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