[SMM survey] SMM survey: Some steel mills conducted rolling line maintenance, leading to a decrease in rebar supply in Central China this week

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

During the survey period (June 10 - June 16), the operating rate and capacity utilization rate of rebar rolling lines in Central China both declined; the weekly production of wire rod increased MoM.

Data source: SMM

During the survey period (June 10 - June 16), the operating rate and capacity utilization rate of rebar rolling lines in Central China both declined.

Specifically: Some electric furnace plants in Hubei province fully halted production due to poor profits; some steel mills in Hunan province had temporary maintenance of bar and wire rod lines due to equipment failures; some steel mills in Henan province planned to dismantle old bar and wire rod lines due to product transformation, and in addition, some electric furnace plants had failures in their bar and wire rod lines, leading to production halts and maintenance starting from June 16; under the combined impact, production in the region significantly decreased. In terms of in-plant inventory, there was relatively small change in direct supply from steel mills. Given the reduction in supply, in-plant inventory significantly decreased this week.

It is expected that the operating rate of rebar rolling lines in Central China will increase from a decline next week, mainly because steel mills in Hubei and Henan provinces plan to resume production of rebar rolling lines, which will drive an MoM increase in production.

Data source: SMM

During the survey period (June 10 - June 16), the weekly production of wire rod in Central China increased MoM.

Specifically: Some steel mills in Hubei province had temporary production over the weekend, while some steel mills in Henan province increased production of wire rod by diverting surplus billets due to the halt of bar production, leading to an increase in wire rod production. In terms of in-plant inventory, the demand for wire rod showed a pullback. Additionally, affected by the increased production from steel mills, the inventory of coiled rebar at steel mills slightly increased.

It is expected that most steel mills in Central China will continue to maintain the current production pace for wire rod next week, with only a few steel mills having fewer actual operating days than this week, resulting in a slight decline in capacity utilization rate.

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