More than half of 2017 has passed. Despite experiencing 'local steel,' the cumulative production of rebar still decreased by 0.9% compared with the same period last year. What is the main reason for this? Wuxi copper busbar will introduce it to you!

On one hand, driven by high profits, long-process steel mills are operating at full capacity, and there is limited room to further increase production rates; on the other hand, according to surveys, the previously expected additional electric arc furnace output in July and August is unlikely to be effectively put into production, indicating that the production substitution from electric arc furnaces to medium-frequency furnaces will be delayed. In addition, the recent rise in hot-rolled coil prices has led to a rapid rebound in hot-rolled coil production profits, significantly narrowing the profit gap with rebar production. The further transfer of molten iron to rebar will slow down. Moreover, with the recent sharp increase in billet prices, the production profits of billet-processing and rolling mills are severely squeezed, with some steel mills already experiencing slight losses. As a result, the maintenance schedules of billet-processing and rolling mills may increase. Considering the above, it is expected that rebar production is unlikely to increase significantly in the short term. With rebar production remaining high, rebar inventories remain low, indicating strong steel demand particularly in the Beijing-Tianjin-Hebei region, which will maintain a tight short-term steel supply-demand balance and support steel prices.

Since the beginning of this year, the high production profits of rebar have stimulated steel mills' willingness to produce, and some steel mills have shifted the flow of molten iron from plate steel to rebar. Data shows that since February this year, the weekly production ratio of rebar to hot-rolled coils has continuously increased, and it has now risen to the level of October last year. Due to the flow of molten iron, hot-rolled coil supply is tight in some areas. Based on inventory data from recent weeks, the rate of decline in social inventory of hot-rolled coils has significantly accelerated, and last week, while social inventory of rebar slightly increased, hot-rolled coil inventory continued to decline. It is expected that driven by this, short-term prices of stop-water copper plates will continue to be strong, and the pattern of "strong plates and weak long products" will intensify.

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