SMM Cold-Rolled Production Schedule: Daily Average Cold-Rolled Production in March Decreased by 12,900 mt
According to the latest tracking by SMM, the total planned volume of cold-rolled products from 31 mainstream steel mills in March was 4.2753 million mt, an increase of 52,900 mt (up 1.3%) compared to the actual cold-rolled production in February. On a daily average basis, March had three more days than February, with a daily planned volume of 137,900 mt, down 8.5% MoM from February's actual daily average production.
Table 1: Planned Volume of Cold-Rolled Commercial Materials from 31 Mainstream Steel Mills
Data Source: SMM Steel
SMM HRC Production Schedule: Steel Mill Maintenance Impact Increases, March HRC Daily Average Production Schedule Declines
According to the latest tracking by SMM, the planned production of HRC commercial materials by 39 mainstream steel mills in March totaled 13.54 million mt, a decrease of 203,700 mt compared to the actual production in February, down by 1.5%. On a daily average basis, with three more days in March compared to February, the planned production of HRC commercial materials in March was 436,900 mt/day, a decrease of 54,100 mt/day compared to February's actual daily average production, down by 11.0%.
After expanding the sample to 51 mainstream steel mills, the planned production of HRC commercial materials in March totaled 16.51 million mt, with the daily average planned production decreasing by 10% compared to February's actual production. At present, steel mill production efficiency has moderately improved, coupled with the seasonal demand boost from the manufacturing sector, leading to moderate production enthusiasm among steel mills. However, some steel mills in North and South China are undergoing annual overhauls, resulting in a significant decline in HRC production schedules this month.
Chart-1: Planned Production of HRC Commercial Materials by New Sample Steel Mills
Data Source: SMM Steel
Chart-2: Regional Proportion of Planned Production by Mainstream Steel Mills for HRC Nationwide
Data Source: SMM Steel
By Domestic and Export Trade:
Domestic Trade: The domestic production schedule for HRC in March was 12.3158 million mt, with a daily average of 397,300 mt, down 47,700 mt (10.7%) MoM compared to February's actual daily average production. In March, manufacturing demand demonstrated strong resilience, and most steel mills reported good domestic order-taking performance. Considering the current similar production profits between coils and rebar, some steel mills maintained stable HRC production schedules without plans for significant increases. A new round of maintenance planned by some steel mills in North and South China also contributed to the MoM decline in domestic HRC production schedules in March.
According to the SMM survey, as of March 6, the average orders held by sample steel mills this month increased by 25% MoM. Several steel mills reported good performance in domestic trade orders. SMM will continue to track the subsequent order-taking situation.
For exports:
The planned export volume of HRC in March is 1.228 million mt, down 60,000 mt from the actual export volume in February, a decrease of 4.7% MoM. The planned export volume of HRC by domestic steel mills in March slightly declined compared to February.
Regarding new orders, SMM learned that after the Chinese New Year, frequent announcements of anti-dumping measures overseas have heightened market concerns. Some overseas customers canceled orders, increasing export uncertainties and weakening recent order-taking by steel mills. Notably, the impact of Vietnam's anti-dumping measures has intensified. However, for certain specifications not subject to its sanctions, some steel mills have seen a significant improvement in export orders recently, with active inquiries.
Chart-3: Planned Export Volume of Hot-Rolled Commercial Steel Products from Mainstream Steel Mills
Data Source: SMM Steel
Maintenance side, the impact from hot-rolled maintenance in March is temporarily 513,400 mt, up 278,900 mt MoM. The announced maintenance is mainly concentrated in steel mills in north China, south China, and east China. SMM will continue to monitor the subsequent developments.
Profitability: According to the SMM survey on steel mills' real-time profitability of HRC production, most steel mills currently report real-time profits of 100 yuan/mt or more, showing improvement compared to early February. Specifically, about 5% of steel mills reported current losses exceeding 100 yuan/mt; approximately 16% reported losses in the range of 50-100 yuan/mt; 26% were at the breakeven point; 21% reported profits in the range of 50-150 yuan/mt, and 32% reported profits exceeding 100 yuan/mt.
Summary: The daily average planned production of HRC by domestic steel mills in March decreased compared to the actual production in February on a MoM basis, mainly due to the impact of concentrated maintenance at some steel mills.
Looking ahead, HRC production in March is expected to decline, easing supply-side pressure. This week, SMM's HRC inventory has already started to decrease. On the demand side, domestic trade orders at steel mills performed well, and downstream operating rates are steadily increasing from March to April. Coupled with relatively low raw material inventories at downstream enterprises, there is still room for further growth in demand for sheets & plates, with relatively small imbalances in fundamentals.
On the macro side, the Two Sessions are currently underway, and the positive policies targeting steel industry consumption will take time to impact the market. Additionally, the NDRC recently reiterated the "continued implementation of crude steel production control," leading to an increase in market news regarding policy-driven supply-side production cuts, providing some support for the bottom of steel prices. March enters the peak season for demand verification, with a "policy bottom" supporting the downside and increasing export sanctions limiting the upside. In the absence of significant news stimuli, the price range for HRC in March is expected to remain relatively limited.
