Core Viewpoint - The domestic steel market is entering a traditional demand off-season in July, with weak terminal procurement leading to a significant slowdown in inventory depletion, while the end of the safety production month is expected to weaken cost support from raw materials, resulting in a fluctuating steel price range [2][21]. Production and Supply - The operating rate of blast furnaces initially decreased and then increased, while the operating rate of electric arc furnaces saw a significant decline. As of June 26, the operating rate for independent electric arc furnaces was 36.36%, down 9.09 percentage points month-on-month and year-on-year. The operating rate for blast furnaces was 78.27%, down 0.64 percentage points month-on-month and 0.96 percentage points year-on-year [3]. - Steel production data shows that as of June 25, the total weekly production of construction steel was 3.1985 million tons, a month-on-month decrease of 81,000 tons (2.47%) and a year-on-year decrease of 204,100 tons (6%). The total weekly production of hot-rolled coils was 3.6479 million tons, a month-on-month increase of 100,000 tons (2.82%) but a year-on-year decrease of 237,500 tons (6.11%) [5]. - In June, steel mills increased their production cuts and maintenance efforts compared to May, with a notable increase in maintenance for rebar and a decrease for hot-rolled and wire rod [7]. Demand and Consumption - In June, steel consumption across various categories saw a month-on-month decline, with hot-rolled coils down 5.7%, cold-rolled down 6.9%, medium plates down 4.5%, and construction materials down 8.5%. Expectations for July indicate further declines, albeit at a reduced rate [9][11]. - The apparent consumption of construction steel as of June 25 was 3.2054 million tons, a month-on-month decrease of 204,800 tons (6.01%) and a year-on-year decrease of 149,300 tons (4.45%). For hot-rolled coils, the apparent consumption was 3.6405 million tons, a month-on-month decrease of 1,080 tons (0.3%) and a year-on-year decrease of 262,800 tons (6.73%) [13]. Inventory - Steel inventory depletion has slowed, with total inventory levels significantly lower than the same period last year. As of June 25, the total inventory of construction steel was 6.8585 million tons, a month-on-month decrease of 594,200 tons (7.97%) and a year-on-year decrease of 1.8992 million tons (21.69%). The total inventory of hot-rolled coils was 3.0916 million tons, a month-on-month decrease of 85,000 tons (2.68%) and a year-on-year decrease of 624,300 tons (16.8%) [15][17]. Profitability - In June, the profitability of blast furnace steel mills expanded, while electric arc furnace steel mills continued to incur losses. As of June 27, the production profit for rebar from blast furnaces was 203 yuan/ton, up 105 yuan/ton month-on-month, while electric arc furnaces reported a loss of 248 yuan/ton. The profit for hot-rolled coils from blast furnaces was 223 yuan/ton, up 149 yuan/ton month-on-month [19][20]. Market Outlook - Looking ahead to July, the domestic steel market will face intensified supply-demand dynamics due to the high-temperature off-season. The demand is expected to weaken further, while the cost support from raw materials is anticipated to diminish. Despite the low valuation of current steel prices and low overall inventory, the expected increase in maintenance and production cuts at steel mills may lead to a fluctuating price range [21].
中国经济观测点丨高温淡季深化 预计7月钢市供需博弈加剧
Xin Hua Cai Jing·2025-07-02 04:42