Supply of construction steel rebar is expected to pick up around mid-March after weeks of declining amid maintenance and production cut at producers on the coronavirus impact, as steel rolling mills in east China continue to step up production and suspended electric arc furnace (EAF) steelmakers mull resumption in the middle of the month.

Like EAF steel plants, steel rolling mills also grappled with inventory and cash flow pressure resulted by the slow post-holiday recovery of downstream demand, but greater availability of raw materials steel billet, compared with steel scrap, and more flexible production operations narrowed the losses facing steel rolling mills.

A slew of steel rolling mills in east China reported slight profits and one mill had restarted operations as early as February 11, with current operating rates ramping up to 100%, SMM learned. Another steel rolling plant in east China kept half of its capacity in operation after reopened in mid-February, and planned to hike the operating rates to 80% next week.

Steel rolling mills in other regions such as south China planned to resume production in mid-March.

SMM data showed that the operating rates across EAF steel plants in China stood at 7.58% as of March 3. About 40.7% of the suspended producers planned to resume operations in mid-March, but raw materials shortage and limited profits may constrain their production to less than half of the normal levels.