The pattern of stable supply and weak demand remains unchanged, and the total inventory of construction materials is expected to continue accumulating next week

This week, the total inventory of construction materials continued to accumulate. Among them, the total inventory of rebar was 5.5104 million mt, with a WoW increase of 5.28%. The total inventory of wire rod was 1.2834 million mt, with a WoW increase of 5.86%. Supply side, the performance of blast furnace steel mills was moderate, and their production enthusiasm remained high. Currently, the hot metal production of steel mills was still at a relatively high level. EAF steel mills, however, faced dual pressures of inventory buildup of finished products and increased costs of steel scrap recycling. This week, the operating rate of electric furnace mills declined slightly, but the overall supply level remained largely unchanged. Demand side, the current high-temperature weather persisted, and downstream demand remained weak. Terminal users mostly maintained just-in-time procurement, and the overall transaction situation was weak. Overall, supply was stable while demand decreased, and the inventory of construction steel continued to accumulate, with both in-plant inventory and social inventory showing accumulation.

This week, the total inventory of rebar was 5.5104 million mt, increasing by 276,200 mt WoW, with a WoW growth rate of 5.28% (previous value: +1.97%). Compared to the same period of the lunar calendar last year, it decreased by 550,200 mt, with a decrease rate of 9.08% (previous value: -18.51%).

This week, the in-plant inventory of rebar was 1.741 million mt, increasing by 39,100 mt WoW, with a growth rate of 2.30% (previous value: -3.81%). Compared to the same period last year, it increased by 38,300 mt, with a growth rate of 2.25% (previous value: -6.05%). Currently, the profitability of blast furnace steel mills was moderate, and their production enthusiasm remained high. The overall supply level was still at a high level. However, influenced by the jump initially and then pull back of futures, agents were cautious and had a weak willingness to purchase. Under the dual impact, in-plant inventory accumulated to some extent.

This week, the social inventory of rebar was 3.7695 million mt, increasing by 237,000 mt compared to last week, with a growth rate of 6.71% (previous value: 1.10%). Compared to the same period last year, it decreased by 588,400 mt, with a decrease rate of 13.50% (previous value: -23.4%). The high-temperature weather persisted, and terminal users' enthusiasm for procurement was generally low. Most transactions were based on just-in-time resources, and the market had a low willingness to stockpile. Social inventory continued to accumulate.

Looking ahead, supply side, the impact of the "September 3 Military Parade" is still uncertain, and whether subsequent production restrictions will be imposed on blast furnaces in steel mills remains unclear. However, considering the current moderate profitability of blast furnace steel mills, if there is no policy guidance, it is expected that short-term supply will be difficult to decrease. Demand side, the current high-temperature and rainy weather persists, and it is difficult to improve the downstream construction progress in the short term. The market mostly adopts purchasing as needed, and the enthusiasm for stockpiling is not high. In summary, the supply-demand imbalance is still gradually accumulating. It is expected that the total inventory of construction materials will continue to accumulate next week, and subsequent attention should be paid to abnormal movements in the macro direction.