Operating Rate and Forecast for Building Materials Production Lines at Steel Mills in Central China

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

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

Specifically: Some electric furnace plants in Hubei province fully halted production due to poor profitability; some steel mills in Hunan province conducted temporary maintenance on their bar and wire rod lines due to equipment failures; some steel mills in Henan province planned to dismantle old bar and wire rod lines for product transformation, and in addition, an electric furnace plant in Henan province experienced failures in its bar and wire rod lines, leading to a production halt and maintenance starting from June 16. Under the combined impact, production in the region significantly declined. In terms of in-plant inventory, there was relatively small change in direct supply from steel mills. Given the reduced supply, in-plant inventory significantly decreased this week.

It is expected that the operating rate of rebar rolling lines in the Central China region will increase next week after declining, 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.

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

Specifically: Some steel mills in Hubei province had temporary production activities over the weekend, while some steel mills in Henan province increased production of wire rod by utilizing 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 in-plant inventory of coiled rebar at steel mills slightly increased.

It is expected that most steel mills in the Central China region will continue to maintain their 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.