One mill source said that without new measures to stimulate domestic consumption, demand from manufacturing sectors such as automotive and home appliances is unlikely to improve significantly in the coming months, and the peak consumption season could be shorter than last year. He noted that last year’s peak steel consumption season lasted from late August until early November.

“Although manufacturing steel demand overall remains resilient, too many steel mills have shifted production away from construction steel and into manufacturing-used flat steel products, resulting in rising steel inventories and limiting upward momentum in prices,” the mill source said.

The hot-rolled coil inventories at major spot markets monitored by the China Iron and Steel Association reached 2.36 million mt as of Aug. 10, up about 30.4% from a year earlier, according to the latest CISA data.

If additional stimulus measures were introduced toward the end of the quarter, steel demand, prices and mill profitability could improve in the fourth quarter, according to the mill source.

Another mill source said his company’s order books showed the strongest demand growth coming from the shipbuilding sector, supporting robust plate consumption. Demand from the manufacturing sector for wire rod and HRC was largely unchanged from a year ago, he said.