[SMM Rebar Production Schedule] Total Building Materials Production Changes Relatively Small, but Structural Adjustment in Production with Rebar Increasing and Wire Rod Decreasing

Starting from October 2025, export schedule data from steel mills has been added. The planned production of rebar and wire rod includes exports but excludes steel billet exports.

According to SMM survey data from 56 key steel producers:
- Planned rebar production in January was 7.3122 million mt, up 259,800 mt from actual production in December, an increase of 3.68%.
- Planned wire rod production in January was 2.982 million mt, down 267,300 mt from actual production in December, a decrease of 8.23%.

Chart-1-2: Planned Production of Rebar & Wire Rod at Main Construction Steel Mills (56 mills)

Data source: SMM

- Export schedule of long products from sample steel mills in January was 673,200 mt, up 61,700 mt MoM, of which steel billet export schedule was 300,000 mt.

Chart-3: Export Schedule of Long Products from Sample Steel Mills

Data source: SMM

Overall:
In December, national construction steel prices showed sideways movement. In the first and middle ten days, positive factors from domestic political bureau and economic meetings fell short of expectations, and the US Fed interest rate cut did not exceed expectations, coupled with panic sentiment due to export license controls, spot prices fell to low levels. In the middle and late ten days, after pessimistic sentiment was digested, coking coal and coke news-driven increases led to a phased rise in finished products, and approaching New Year's Day, futures operations weakened, spot trading returned to fundamentals. Cost side, iron ore prices had strong short-term support, while coke implemented four rounds of price cuts, raw material side continued to concede profits, steel mill production profitability improved. Currently, the steel mill profit rate is 69.44%, continuing to improve MoM, with general profit levels between (-100-200).

Although mill profitability improved in January, due to seasonal off-season demand, mills had low enthusiasm for production increases, and some mills still had annual maintenance plans, so total construction steel production change was relatively small. Specifically, mills in east China and central-south regions resumed production of bar and wire, rebar production increased significantly, but wire rod production was high earlier, recently prioritizing digestion of previous inventory, leading to a decrease in wire rod production in January. Northwest region had poor profitability, with bar and wire having technological transformation and maintenance plans, production continued to decline, while northeast region was in winter break, some mills continued to focus on selling billets, construction steel production remained low.

Table 1: Actual Values of Rebar and Coiled Rebar Production Schedule Last Month and Planned Volume This Month

Data Source: SMM

Looking ahead, production differentiation among steel mills by product type is expected to continue. Recently, the destocking pace of wire rod inventories at mills has fallen short of expectations, prompting some hot metal originally allocated for wire rod production to shift toward rebar. However, compared to other product categories, the profitability of construction steel remains relatively weak. Steel mills in north China continue to directly export steel billets, while multi-product mills prioritize the production of plate and strip, resulting in only a modest increase in construction steel output. As a result, the overall planned production of construction steel in January shows little change MoM. EAF steel mills have maintained profits over the past two months, leading to higher production enthusiasm than in previous periods. However, production during peak electricity hours remains unprofitable, so operations are largely maintained during off-peak hours. There is limited room for further production increases.

Additionally, as many mills are scheduled for concentrated annual maintenance around month-end, operating rates are expected to gradually decline in the latter part of the month. Overall, the sales and profitability of specialty steel products continue to outperform rebar. Following annual maintenance in January, many mills plan to resume production after the Chinese New Year. Therefore, construction steel output at sample mills is expected to remain at low levels until the holiday.