Rebar inventory accumulation slope increased due to weakening demand

The accumulation slope of construction steel inventory increased, with rebar inventory up 6.10% WoW and wire rod up 7.17%. On the supply, BF steel mills maintenance affected 1.6991 million mt of capacity, up by 34,200 mt WoW. In terms of EF steel mills, the operating rate of the China's 50 EF steel mills that mainly produce building materials was 53.60%, down by 1.98 percentage points WoW, and the overall output is declining; on the demand, although the market moved rangebound in positive territory, severe weather and cola wave affected the construction progress in the north and south. The rigid demand continued to shrink, accelerating the inventory accumulation.

The total rebar inventory last week was 6.3961 million mt, up by 367,700 mt, an increase of 6.10% (previous value 2.71%).

Last week's rebar inventory in the factory was 1.8757 million mt, up by 58,200 mt, a month-on-month increase of 3.20% (previous value -2.78%). Downstream shipments were hampered, traders' willingness to receive goods was weak, and factory inventories turned from falling to increasing.

Rebar social inventory was 4.5203 million mt, up by 309,500 mt from last week, a week-on-week increase of 7.35% (previous value: 5.27%). Social warehouses have continued to accumulate significantly. The construction sites have been suspended due to weather at the end of the year, and demand has shrunk. Moreover, it has basically entered the end of winter storage, and warehouses are being put into storage in various places.

Looking ahead, on the supply, although some blast furnaces under inspection are expected to resume production next week, considering that nearly 60% of the electrical furnaces are planned to be shut down in late January, the production load will face a rapid decline, and the overall output may still be weak; On the demand, as the end of the year approaches, downstream construction sites are shutting down one after another, and demand will continue to shrink. In summary, building materials inventories are expected to accelerate accumulation.