Construction Steel Production Continues to Decline amid Increased Maintenance Activity

[SMM Survey] Number of Steel Mills Cutting Output for Maintenance Rises; Construction Steel Output Continues to Decline
During the survey period (July 7 - July 13), in Central China, the rebar operating rate and capacity utilization rate edged down; the coiled rebar operating rate remained stable, while its capacity utilization rate edged down.

During the survey period (July 7 - July 13), both the rebar operating rate and capacity utilization rate in Central China edged down.

Specifically, most steel mills in the region maintained their current production pace. In Hunan, an individual steel mill chose to take a blast furnace under maintenance and simultaneously halted one rebar rolling line due to poor profitability. Meanwhile, some EAF steel mills in Henan reduced operating hours, leading to a notable reduction in regional supply. On the inventory side, downstream end users largely purchased as needed. Weather conditions were moderate during this period, with rigid demand purchases improving slightly. Coupled with the significant supply reduction, inventory edged slightly lower compared to the previous period.

For the next period, Central China's rebar supply is expected to decline further, mainly because the Henan EAF steel mills reduced operating hours mid-week this period, and next period's total operating hours will be shorter than this period, driving the capacity utilization rate to edge down.

During the survey period (July 7–July 13), the operating rates of wire rod rolling lines at steel mills in Central China remained temporarily stable, while capacity utilization rate edged down.

This was mainly because some EAF steel mills in Henan province had poor profitability and chose to reduce operating hours, leading to a reduction in wire rod supply within the region. On the mill inventory side, wire rod shipments in the market during the survey period showed mediocre performance, and inventory basically maintained stable fluctuations.

Wire rod supply from steel mills in Central China is expected to edge up in the next period, mainly because a steel mill in Hubei plans to sporadically resume production of a wire rod rolling line, driving up both operating rate and capacity utilization rate of rolling lines in the region. Supply volume and operating rate may hold steady.