[SMM Survey] Weekly Survey of Central China Rolling Lines: Poor per-mt Profitability of Construction Steel Leads to Production Cuts at Steel Mills

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

During the survey period (Jun 30-Jul 6), the rebar capacity utilization rate in the Central China region edged down slightly. Steel mills in the region had no plans to adjust wire rod rolling lines, keeping wire rod supply at low levels.

Data source: SMM

During the survey period (Jun 30-Jul 6), the rebar capacity utilization rate in the Central China region edged down slightly.

Specifically, most steel mills maintained their existing production pace. Only a few mills in Hubei province, affected by poor profitability, reduced production slightly. On the inventory side, downstream end-users mostly continued purchasing as needed. As the weather cleared last weekend, shipments improved slightly, leading to some destocking compared to the previous period.

It is understood that per-mt profit at steel mills in Central China currently hovers near the break-even line, resulting in weak production motivation. Some mills plan to continue reducing production. Next period, the regional operating rate is expected to remain stable, while production and capacity utilization rate are expected to edge down slightly.

Data source: SMM

During the survey period (Jun 30-Jul 6), steel mills in the Central China region had no plans to adjust wire rod rolling lines, keeping wire rod supply at low levels.

On the mill inventory front, during the survey period, mills outside the region switched to producing industrial wire rod, reducing the inflow of wire rod resources into the region. Meanwhile, end-user purchases of regional mill-branded resources increased, leading to a continuous, slight decline in wire rod inventory.

Next period, wire rod rolling lines at Central China steel mills are mostly expected to maintain their current production pace. Production and operating rate will likely remain stable.

All data, except publicly disclosed information, is derived based on public data, market communication, and SMM's internal database models, and processed by SMM. It is for reference only and does not constitute any decision-making advice.