Demand gradually recovers. Will the supply and demand of building materials in central China improve? [SMM Survey]

Operating rate and forecast of building materials production line of central China steel mills

Within the survey cycle (February 20-February 26), the rebar rolling line operating rate in central China rebounded slightly, but output is still declining. It is expected that the production of building materials may increase next week. Specifically, in terms of EF steel mills, Henan and Hubei electric furnace steel mills stopped production before the holidays and basically resumed work around Feb 24. This period mainly affects the rolling line operating rate, and the impact on output has not yet been reflected; in terms of BF steel mills, affected by market conditions, some Hubei steel mills have suspended production of building materials rolling lines. At the same time, some steel mills in Henan have added maintenance due to inventory pressure. The impact is concentrated this week. In terms of inventory at smelters, downstream operations have not yet started in the first week after the holiday. Traders were affected by the weather and steel prices were fluctuating at low levels. Their enthusiasm for replenishing goods is low, and inventory at smelters are still accumulating.

It is expected that rebar production in central China will rebound next week: on the one hand, the rolling line maintenance of Hubei and Henan steel mills has completed in this period, and there are expectations for production resumption; on the other hand, EF steel mills may usher in an intensive resumption of production, driving an increase in production.

During the survey cycle (February 20-February 26), the wire rod operating rate and output in central China increased. There are steel mills in Henan that have resumed rebar rolling line production in this period, but the preliminary maintenance volume of individual steel mills in Hubei has been reflected in this period, so the overall wire rod production in central China has only increased slightly. In terms of inventory at smelters, demand has not yet picked up in the first week after the holiday, and steel mill inventories continue to accumulate.

Rolling lines will resume production in Henan, Hubei and Hunan next week, and it is expected that the output of wire rod in central China may rebound.