According to SMM statistics, mill inventory and social inventory continued to diverge this period. Steel mill production declined, and mill inventory still saw a slight destocking, while social inventory continued to build up, though the pace of inventory buildup slowed. Total construction steel inventory stood at 8.4788 million mt, up 0.06% MoM, an increase of 5,400 mt.

Hydnum Steel has secured a €150m investment commitment from COFIDES via the Co-investment Fund for the Iberian Peninsula's first clean steel facility in Puertollano. This funding is part of a €1.5bn+ financial strategy consisting of ~€600m in equity and ~€1bn in debt. The plant will use EAFs powered by green hydrogen and 100% renewable electricity, cutting CO₂ emissions by up to 98% versus conventional blast furnaces. Construction is scheduled to begin by end-2026, creating over 5,000 total jobs.

As of August 4, the operating rate of 50 EAF steel mills in China primarily producing construction steel stood at 33.58%, down 1.96% WoW; capacity utilization rate was 33.67%, down 1.64% WoW; and daily average production of construction steel was 75,000 mt, down 3,600 mt WoW.

Futures first rose and then fell today, closing at 2,983, down 0.2% from the previous trading day. On the spot side, most markets held offers steady in the morning; in the afternoon, as futures drifted lower, some markets edged down 10-20 yuan/mt, with overall trading sentiment weak. Fundamentals, supply side, both blast furnace and EAF steel mills mostly saw losses in per-mt steel margins. Recently, EAF mills have reduced working hours or halted production, and blast furnace mills have also cut output or conducted rolling line maintenance. According to SMM’s weekly maintenance survey, the impact from maintenance this period was 938,600 mt, up 174,200 mt WoW, and supply pressure on construction steel eased somewhat. Demand side, futures slightly recovered this morning, lifting market activity modestly and releasing downstream rigid procurement demand, though overall room for demand growth was limited. Overall, the market is in a macro vacuum period, construction steel fundamentals lack momentum, and short-term prices will likely continue to consolidate at lows.

During the survey period (July 28 - August 3), the rebar capacity utilization rate in Central China declined, while both the operating rate and capacity utilization rate of wire rod fell.

Today, futures consolidated on a subdued note, closing at 2,976, down 1.23% from the previous trading session. Spot side, in the morning, most market quotes fell, with prices declining 10-30 yuan/mt. In the afternoon, futures continued to consolidate on a weak note, with some markets following with a drop of 10-20 yuan/mt. Overall, transactions were mediocre to weak. Fundamentals, supply side, currently, most steel mills had comprehensive per-ton steel margins below the break-even line, and mills gradually arranged maintenance on blast furnaces and associated construction steel rolling lines or reduced production loads; EAF steel mills further reduced operating hours. Demand side, futures fell below the 3,000-point level, market confidence was notably weak, with many adopting a wait-and-see attitude, and trading sentiment was mediocre. Meanwhile, due to sustained high temperatures in many areas, the pace of outdoor housing construction was hindered, and end-user rigid procurement demand was weak. Overall, in the short term, the supply-demand dual weakness pattern remained unchanged, and construction material prices might continue to consolidate at lows.