[SMM Hot-Rolled & Cold-Rolled Production Schedule] — Orders Booming, Daily Average Production Schedule for Cold and Hot Rolling Both Increased in February!

SMM Cold-Rolled Production Schedule: February Steel Mills' Daily Average Cold-Rolled Production Increased by 9.2% Important Notice: Starting from September 2024, SMM will officially launch data on cold-rolled production schedules from 31 blast furnace steel mills, covering 100% of the sample proportion of blast furnace cold-rolled steel mills. According to the latest SMM tracking, the planned production volume of cold-rolled products from 31 mainstream cold-rolled steel mills in February totaled 4.2424 million mt, down by 60,600 mt or 1.4% compared to the actual production volume in January. On a daily average basis, February, with fewer days, had a planned daily average production of 151,500 mt, up 9.2% MoM from January's actual daily average production. In February, several steel mills reported strong orders related to home appliances and automobiles, with high production enthusiasm, keeping cold-rolled production schedules at elevated levels. Table 1: Planned Production Volume of Cold-Rolled Products from 31 Mainstream Cold-Rolled Steel Mills Source: SMM Steel SMM Hot-Rolled Production Schedule: Strong Orders & Several Mills Ending Annual Maintenance; February Daily Average Hot-Rolled Production Increased According to the latest SMM tracking, the planned production volume of hot-rolled products from 39 mainstream HRC steel mills in February totaled 13.8055 million mt, down by 316,600 mt or 2.2% compared to January's actual production. On a daily average basis, February's planned daily average production of hot-rolled products was 493,100 mt/day, up by 37,500 mt or 8.2% MoM from January's actual daily average production. For the expanded sample of 51 mainstream HRC steel mills, the planned production volume of hot-rolled products in February totaled 16.6415 million mt, with the daily average planned production up 6.7% MoM from January's actual production. Driven by "national subsidies" and multiple stimulus policies, manufacturing demand showed strong performance. Several steel mills reported robust orders for cold-rolled and hot-rolled products before and after the Chinese New Year, boosting production enthusiasm. Combined with moderate profitability of sheet products, February's daily average hot-rolled production schedule increased MoM. Chart-1: Planned Production Volume of Hot-Rolled Products from New Sample Steel Mills Source: SMM Steel Chart-2: Regional Share of Planned Production Volume of Hot-Rolled Products from Mainstream Steel Mills Nationwide Source: SMM Steel By Domestic and Export Trade: Domestic Trade: The planned production volume of HRC for domestic trade in February was 12.4175 million mt, with a daily average of 443,500 mt, up by 28,600 mt or 6.9% MoM from January's actual daily average domestic production. In February, demand for construction materials was seasonally sluggish, while manufacturing demand remained resilient. Before and after the Chinese New Year, domestic orders from steel mills performed well. Additionally, several steel mills in east, north, and central China resumed production after maintenance, driving up February's daily average domestic HRC production schedule. Table 2: Comparison of Orders from Some Steel Mills Surveyed by SMM Source: SMM Steel According to SMM's survey, as of February 8, the average order volume held by sample steel mills increased by 4% MoM. Some steel mills reported overbooking, and SMM will continue to track subsequent order trends. Export Trade: The planned export volume of HRC in February was 1.388 million mt, up by 127,000 mt or 10.1% MoM from January's actual export volume. Domestic steel mills' planned HRC export volume increased compared to January. Regarding recent new orders, SMM learned that some steel mills reported slight rebounds in domestic prices before and after the Chinese New Year, while export prices remained stable with a weak trend. Export profitability slightly declined, and overall order-taking was stable. However, some steel mills showed strong domestic order-taking enthusiasm, while their export order-taking enthusiasm was moderate due to lower export prices. Additionally, SMM learned that some steel mills raised their annual group export targets, indicating that steel enterprises are expected to accelerate their "go global" efforts in 2025. Chart-3: Comparison of HRC Export Prices in Major Global Markets Chart-4: Planned Export Volume of Hot-Rolled Products from Mainstream Steel Mills (New Sample) Source: SMM Steel Maintenance: The impact from maintenance on HRC production in February was temporarily estimated at 318,500 mt, up by 81,000 mt MoM. Currently announced maintenance is mainly concentrated in steel mills in north China. SMM will continue to track subsequent developments. Detailed maintenance information is shown in the table below: Table 3: Comparison of Maintenance Details of HRC Steel Mills Source: SMM Steel Profitability: According to SMM's survey on steel mills' real-time profit situation for HRC production, most steel mills' real-time profits are concentrated in the range of 50-100 yuan/mt, similar to the situation in early January. Specifically, about 3% of steel mills reported current losses exceeding 100 yuan/mt; about 21% reported losses of 50-100 yuan/mt; 21% were at breakeven; 48% reported profits in the range of 50-150 yuan/mt; and 7% reported profits exceeding 100 yuan/mt. Chart-5: Real-Time Profit Situation of HRC Production from Some Steel Mills Surveyed by SMM in Early January and Early February Summary: In February, the daily average planned production volume of HRC from domestic steel mills increased MoM from January's actual production, mainly due to the resumption of production after annual maintenance by some steel mills and good domestic order-taking performance before and after the Chinese New Year, which boosted production enthusiasm. Looking ahead, February's HRC production is expected to increase MoM. On the demand side, several steel mills reported good order-taking performance in manufacturing sectors such as automobiles, home appliances, and shipbuilding. Downstream demand is expected to see a rapid recovery after the Lantern Festival, strengthening market sentiment. The fundamentals may show a strong supply-demand dynamic. Additionally, considering the mid-to-late February "Two Sessions" preheating period, market expectations for stimulus policies are rising, amplifying the impact of macro news. Under the combined influence of rising macro expectations, solid cost support, and no significant fundamental imbalances, February's HRC prices are expected to fluctuate rangebound with slight upward potential.

SMM

[SMM Hot-Rolled & Cold-Rolled Production Schedule] — Orders Booming, Daily Average Production Schedule for Cold and Hot Rolling Both Increased in February!

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