[SMM Rebar Production Schedule] Losses on Production Coupled with Cash Flow Pressures, August Rebar Planned Production Continues to Decline.

Starting from October 2025, new steel mill export schedule data was added; the planned production of rebar and wire rod includes exports but excludes steel billet exports.

According to SMM survey of 56 sample key steel enterprises:

• August planned rebar production was 7.2229 million mt, down 96,100 mt or 1.31% from actual production in July.
• August planned wire rod production was 3.0722 million mt, down 120,800 mt or 3.78% from actual production in July.

Chart 1-2: Mainstream Building Materials Steel Mills' Rebar & Wire Rod Production Schedule (56 Mills)

Source: SMM

• August long steel export schedule of sampled mills was 590,000 mt, down 63,000 mt MoM, of which billet export schedule was 320,000 mt, down 30,000 mt MoM.

Specifically, the decline in August long steel export schedule was mainly in billet, while rebar and coiled rebar orders continued to edge down. Recently, domestic export prices fell steadily, and overseas buyers became more cautious in purchasing willingness, with a strong wait-and-see sentiment; besides, recurring issues in the Strait of Hormuz navigation disrupted inquiries and procurement pace of some Middle Eastern clients, weighing on overall order intake performance. By region, billet orders at mills in Northeast China were not yet fully filled, and if domestic demand performance was not ideal, mills might take more orders; in East China, mills increased billet orders while rebar and coiled rebar orders decreased, mainly because a few mills, considering poor domestic demand, actively lowered prices to take billet export orders. Additionally, a few mills scheduled rolling line maintenance plans for August, reducing available rebar and coiled rebar order volume.

Chart 3: Sample Mills' Long Steel Export Schedule (Including Billet)

Source: SMM

Chart 4: Sample Mills' Billet Export Schedule

Source: SMM

By region:

Table 1: Rebar and Coiled Rebar Production: Last Month's Actual vs This Month's Planned

Source: SMM

Northeast: Some mills reported that export billet order prices were not favorable, and export orders decreased, so some hot metal was diverted back to the building materials sector, with a relatively noticeable increase in wire rod.

North China: Current low profitability, combined with high inventory pressure at some mills, caused short-term risk of negative cash flow; some mills started blast furnace maintenance in early August, simultaneously conducted maintenance on wire rod rolling lines, resulting in a significant reduction in wire rod production in the region.

East China: Production conditions among regional mills diverged significantly. A Jiangsu-based mill conducted blast furnace and rolling line maintenance in July and resumed normal production in August, leading to a marked production rebound; a Shandong mill, considering building materials profitability lower than hot coil and maintaining a bearish outlook on the market trend, significantly reduced its August planned production; additionally, some other mills in the region scheduled maintenance plans for August, so overall planned production still had downside room.

Central & South China: Some producers flexibly adjusted production pace, held expectations for demand improvement in mid-to-late August, and planned to slightly increase rebar output; however, some mills planned to suspend wire rod rolling lines in August due to sluggish wire rod transactions.

Northwest China: Mills in the region suffered from poor production profitability, and some conducted blast furnace maintenance in August, leading to a notable decline in output.

Southwest China: Mills in the region mostly maintained prior production levels, with output changing little.

Cost side:

The third round of coke price cuts was implemented, with a fourth round expected later, while iron ore prices hit a bottom in stages, weakening cost support. Earlier, spot price declines outpaced those of raw materials, widening mill losses. Currently, the steel mill profitability ratio stands at 21.4%, deteriorating further MoM.Prevailing profit levels now range between -200 and 0 yuan/ton.

Chart-5: Real-time profit trends for rebar production at steel mills from 2024 to date

Source: SMM

Chart-6: Marginal profit conditions for rebar at sample steel mills

Source: SMM

Looking ahead:

Some steel mills have already fallen into losses, reducing production enthusiasm. Among them, mills in Northwest, North, and East China, burdened by unprofitable operations and high in-plant inventory pressure, recently planned maintenance on blast furnaces and rolling lines, so planned construction steel output in August will decline further. Wire rod demand performed worse than rebar, leading mills in North and Central China to suspend wire rod lines; therefore, the planned MoM decline in wire rod output is larger than that of rebar.

In summary, steel mills remain profit-oriented, showing low enthusiasm for construction steel production during loss-making phases. Coupled with the August demand transition from slack to peak season, output will continue to fall to the lowest level of the year. However, as September arrives, weather-affected demand performance will improve; moreover, with some new projects commencing, overall market demand will recover, and mills' willingness to proactively increase production may rise.