[SMM Construction Material Inventory] Market Gradually Enters Holiday Period, Total Inventory of Construction Materials Continues to Increase

This week, the total inventory of construction steel continued to increase, with both in-plant and social inventories rising. Rebar total inventory rose 13.22% WoW, while wire rod inventory increased 1.03% WoW. Supply side, EAF steel mills have gradually entered the holiday period, and although some blast furnace steel mills have resumed production, the overall supply level remains low, with relatively small supply-side pressure. Demand side, as the Chinese New Year holiday approaches, most downstream construction sites have ceased operations, leading to a further decline in market demand.

This week, rebar total inventory reached 4.479 million mt, up 522,900 mt WoW, an increase of 13.22% (previous value +1.92%), but down 3.7873 million mt YoY, a YoY decline of 45.82% (previous value -44.71%).

Table 1: Overview of Rebar Inventory

Source: SMM

This week, in-plant rebar inventory stood at 1.3632 million mt, up 113,900 mt WoW, a WoW increase of 9.12% (previous value -0.11%), but down 987,200 mt YoY, a YoY decline of 42% (previous value -36.75%). Some steel mills resumed production as planned this week, with blast furnace operating rates rising. Coupled with the market gradually entering the holiday period and seasonal demand decline, in-plant inventory increased.

Chart-1: Trends in Rebar In-Plant Inventory, 2019-2024

Source: SMM

 This week, rebar social inventory reached 3.1158 million mt, up 409,000 mt WoW, a WoW increase of 15.11% (previous value +2.88%), but down 2.8001 million mt YoY, a YoY decline of 47.33% (previous value -47.74%). As the Chinese New Year approaches, the market has gradually entered the holiday period, with traders leaving the market, leading to a larger inventory buildup of construction steel.

Chart-2: Trends in Rebar Social Inventory, 2019-2024

Source: SMM

Looking ahead, supply side, EAF steel mills have gradually entered the winter break, with resumption mainly expected between the tenth day and the Lantern Festival. Although some blast furnace steel mills have resumed production as planned, the overall supply remains low. Demand side, most construction sites have already ceased operations, and traders have gradually left the market, leaving steel market transactions at their lowest point of the year. Overall, the market currently faces weak supply and demand. Next week, the market will fully enter the Chinese New Year holiday, and construction steel inventory is expected to continue increasing.