Production of Rebar and Hot-Rolled Coil Both Declined, Inventory Slightly Destocked

During the survey period (May 19-May 25), the rebar rolling line operating rate in central China rose while the capacity utilization rate declined.

Specifically, individual blast furnace steel mills in Hubei resumed production as planned, driving up the operating rate. However, since the production resumptions occurred in the latter half of the week, the actual operating days during this period were fewer than the previous period, and the capacity utilization rate continued to decline. In addition, some rebar rolling lines in Henan remained shut down and have not yet resumed production this period. Under the combined impact, rebar supply declined this week. On the mill inventory side, futures fell in the first half of the survey period, compounded by rainy weather, resulting in slow inventory destocking. Over the weekend, news from coal mines stimulated a marked rise in market trading enthusiasm, and merchants' willingness to purchase strengthened, with overall mill inventories edging down.

Next period, rebar supply in central China is expected to increase, mainly because individual blast furnace mills in Hubei resumed rebar rolling lines as planned this period, and operating days will increase next period, driving the regional rebar rolling line capacity utilization rate up accordingly.

During the survey period (May 19–May 25), both the operating rate and capacity utilization rate of wire rod rolling lines in the Central China region declined.

Specifically, during the survey period, some blast furnace mills in Hubei planned to shut down one wire rod rolling line at irregular intervals, leading to a reduction in wire rod supply. Regarding mill inventory, during the survey period, the coal mine incident in Shanxi over the weekend fermented in the market, strengthening bullish expectations. Speculative purchases improved significantly, and demand saw concentrated release, driving mill inventory to shift from accumulation to decline.

It is expected that wire rod supply in the Central China region will continue to decline in the next period, mainly because some steel mills in Hubei shut down one wire rod rolling line during this period, and the number of operating days in the next period will be fewer than this period, causing wire rod capacity utilization rate to decline accordingly.