Steel Supply and Demand Weak on Both Sides, Inventory Continues to Accumulate
Jul 05, 2024
Supply Overview: This week, the supply of the five major steel varieties reached 8.9792 million tons, a decrease of 128,000 tons from the previous week, a drop of 1.4%. The steel production in this period has decreased, mainly concentrated in electric furnace enterprises.
Inventory Overview: The total inventory of the five major steel varieties this week is 17.7999 million tons, an increase of 60,900 tons from the previous week, an increase of 0.3%. The total inventory of the five major varieties this week has accumulated, and the structure shows inconsistency: factory inventory has decreased, while social inventory continues to accumulate.
Consumption Overview: The weekly consumption volume of the five major varieties this week is 8.9184 million tons, of which the consumption of building materials increased by 1.1% month-on-month, and the consumption of sheet materials decreased by 1.8% month-on-month. There is a certain differentiation in the consumption of building materials and sheet materials among the five major varieties this week, with the consumption of building materials rising and that of sheet materials falling, mainly due to a significant increase in the apparent demand for wire materials this period, reaching 980,200 tons, a 5% increase month-on-month.
On the supply side, the production of hot-rolled coils is expected to peak and may remain in a high production state in the short term; on the demand side, the apparent consumption of rebar and hot-rolled coils continues to weaken, and the off-season is coming, with still room for the apparent demand to fall later; on the inventory side, steel inventory will continue to accumulate, and under the background of the seasonal weakening of demand, the steel inventory will maintain the accumulation.
At present, the contradiction between steel supply and demand is not obvious, and the pricing power of steel is currently in the raw material section. Pay attention to the expectations of the upcoming Central Committee and the data of iron water production.
According to the statistics of Mysteel, on the supply side, the production of rebar this week decreased, with a total reduction of 80,100 tons, mainly concentrated in electric furnace enterprises. Looking at the regions, due to poor profits, some steel mills in Central China, South China, and North China have shortened production time and rolling line maintenance, resulting in a significant decrease in production; Xinjiang continues to recover due to the resumption of production in some blast furnace factories and adjustment of production varieties; the production in other regions remains stable.
Regarding the wire rod, the production this week decreased month-on-month, with a total reduction of 55,030 tons. Looking at the regions, the steel mills in the East China region have the largest total decrease of 22,530 tons, followed by the South China, Northeast, Northwest, and Southwest regions, with the total reduction decreasing in turn; the steel mills in North China and Central China have increased production, with the largest increase in Central China at 9,800 tons; the specific reduction areas of steel mills have resumed production after the end of the inspection, and there are inspections in the East China, South China, North China, Northeast, and Northwest regions this week, and there will be inspections in the steel mills in the East China region next week.
On the hot-rolled coil side, the actual production of steel mills this week increased to 3,262,900 tons, an increase of 44,400 tons month-on-month; the main increase is in the East China region, mainly because the SG blast furnace resumed production, and the production increased.
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