Steel mills at central China delayed production resumption due to poor profits [SMM Research]

In the survey period (March 19-March 25), the output of building materials at central China steel mills continued to see decline in rebar and increase in coiled rebar, and the total inventory of steel mills continued to decline; it is expected that the output of rebar and coiled rebar at central China steel mills will rebound in the next period.

During the survey period (March 19-March 25), rebar rolling wire production in central China continued to decline. Specifically: Steel mills in the three provinces delayed in resuming production due to maintenance, and the impact of maintenance this week has become apparent; secondly, although some electric furnace plants in Hubei resumed production, considering that the production time is short, the output increase is small. In terms of factory warehouses, on the one hand, the output of steel mills decreased recently; on the other hand, the market bottomed out last week, which led to an improvement in the spot trading. Agents accelerated the purchase of goods, and inventory has dropped significantly.

It is expected that the rebar production in central China will turn from a decrease to an increase next week. The pressure on factory warehouses continued to ease. In the next period, the steel mills in Henan and Hubei have plans to resume production, and output will rebound.

During the survey cycle (March 19-March 25), the output of wire rod in central China continued to increase this week. Specifically: Henan's steel mills have more production days in this period than in the previous period, and output has increased significantly; other provinces have not changed much. In terms of factory inventory, some steel mills have resumed normal production, and factory inventory has accumulated slightly. Some steel mills in Hunan mainly produced Tianbao materials in the early stage, and recently switched to producing wire rods. It is expected that there is still room for increase in the overall output of wire rods in central China next week.