Over a week of continuous rain and excess production capacity generated massive rebar inventories among steel mills in southern Taiwan. Factories maximized rolling operations to achieve economies of scale and reduce per-unit costs, ignoring declining downstream demand and slower construction site activity caused by the monsoon season in June.

Distributors and processing plants face similar inventory backups, keeping finished steel trapped indoors. In response to the widening imbalance between output and actual shipments, mills are scaling back rolling operations from full capacity to one or two daily shifts.

Market rumors indicate that producers might need to offer shipping incentives by the end of the month to clear out the heavy surplus accumulated across the supply chain.