Flash | 22 Aug 2025 00:21:31 ET │ 9 pages China Materials 2025 On-ground Demand Monitor Series #123 – Steel Inventory and Consumption Data CITI'S TAKE In this series of notes, we aim to track and analyze high-frequency on- ground demand trends in China. Market expectations of a demand recovery have been largely cautious. Latest sector pecking order: aluminum > steel > copper > thermal coal > battery > gold > lithium > cement. Production — According to data from Mysteel, from Aug 15 to Aug 21, total China st ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **steel industry** in China, tracking high-frequency demand trends and production data [1] Core Insights - **Production Data**: - Total steel production in China from August 1 to August 7 was **8.7 million tons (mt)**, reflecting a **0.2% week-over-week (WoW)** increase and a **10.9% year-over-year (YoY)** increase. - Breakdown of production: - Rebar: **2.2 mt** (+4.8% WoW, +31.2% YoY) - Hot-Rolled Coil (HRC): **3.1 mt** (-2.4% WoW, +3.7% YoY) - Cold-Rolled Coil (CRC): **0.9 mt** (-1.3% WoW, +6.1% YoY) [1] - **Year-to-Date Production**: - Total steel production from the beginning of the year was **274 mt**, down **0.8% YoY**. - Year-to-date production breakdown: - Rebar: **68.2 mt** (-3.4% YoY) - HRC: **102.3 mt** (+0.5% YoY) - CRC: **27.7 mt** (+2.2% YoY) [1] - **Inventory Levels**: - As of August 7, China's steel inventory stood at **13.8 mt**, up **1.7% WoW** but down **20.2% YoY**. - Inventory breakdown: - Steel mills: **4.1 mt** (+0.8% WoW, -12.3% YoY) - Traders: **9.6 mt** (+2.1% WoW, -23.1% YoY) - Rebar: **5.6 mt** (-22.7% YoY) - HRC: **3.6 mt** (-18.5% YoY) - CRC: **1.4 mt** (-24.3% YoY) [1] - **Apparent Consumption**: - For the week of August 1 to August 7, apparent consumption was **8.5 mt**, down **0.7% WoW** but up **4.6% YoY**. - Lunar calendar consumption showed a **5.6% YoY** increase. - Breakdown of apparent consumption: - Rebar: **2.1 mt** (+3.6% WoW, +10.5% YoY) - HRC: **3.1 mt** (-4.3% WoW, +2.6% YoY) - CRC: **0.9 mt** (-2.7% WoW, -0.2% YoY) [1] - **Year-to-Date Apparent Consumption**: - Total apparent consumption year-to-date was **271.2 mt**, down **0.4% YoY**. - Breakdown: - Rebar: **66.7 mt** (-3.8% YoY) - HRC: **101.7 mt** (+1.2% YoY) - CRC: **27.8 mt** (+4.0% YoY) [1] Additional Insights - The report indicates a cautious market expectation regarding demand recovery in the steel sector, with a pecking order of demand recovery being aluminum > steel > copper > thermal coal > battery > gold > lithium > cement [1] This summary encapsulates the key data and insights from the conference call regarding the steel industry in China, highlighting production, inventory, and consumption trends.

Investment Rating - The report has shifted its near-term investment pecking order to prioritize steel over other materials, indicating a positive outlook for the steel industry [1]. Core Insights - Market expectations for a demand recovery in China remain cautious, with a focus on tracking high-frequency on-ground demand trends [1]. - Steel production in China has decreased by 2.4% week-over-week (WoW) and 4.3% year-over-year (YoY) for the week of June 6 to June 12, totaling 8.6 million tons [2]. - China's steel inventory as of June 12 was 13.5 million tons, down 0.7% WoW and 23.3% YoY, indicating a tightening supply [3]. - Apparent steel consumption in China for the same week was 8.7 million tons, reflecting a decline of 1.6% WoW and 2.3% YoY [4]. Production Summary - Total steel production from the beginning of the year until now stands at 204.2 million tons, which is a decrease of 1.1% YoY [2]. - Specific production figures for rebar, hot-rolled coil (HRC), and cold-rolled coil (CRC) are 51 million tons, 76.5 million tons, and 20.7 million tons respectively, with varying YoY changes [2]. Inventory Summary - The inventory breakdown shows that steel mills hold 4.3 million tons and traders hold 9.3 million tons, with significant YoY reductions in both categories [3]. - The total inventory for rebar, HRC, and CRC is 5.6 million tons, 3.5 million tons, and 1.4 million tons respectively, with notable declines in rebar and CRC inventories YoY [3]. Consumption Summary - Year-to-date apparent consumption of steel in China is 201.6 million tons, which is a slight decrease of 0.3% YoY [4]. - The apparent consumption figures for rebar, HRC, and CRC year-to-date are 49.3 million tons, 76.2 million tons, and 20.8 million tons, showing mixed YoY performance [4].