Posted on 15 Mar 2023
High production costs gave China's blast-furnace steel mills another financially testing month last month, though their losses on flat steel sales eased further with the recovery in prices, according to Mysteel's latest monthly survey among 91 sampled blast furnace steel producers nationwide.
During February, the losses that the mills under Mysteel's survey were having to bear on their sales of hot-rolled coil averaged Yuan 13/tonne ($1.9/t), lower by Yuan 54/t from the average for January, while the deficit on sales of medium plate also narrowed to Yuan 25/t in February, as against the Yuan 80/t loss in the prior month, the survey showed.
However, the surveyed mills suffered heavier losses on rebar sales in February, with the average deepening by Yuan 13/t on month to Yuan 24/t, a situation also mainly blamed on higher production costs, the findings showed.
During February, the cost for making hot metal among the 91 surveyed mills averaged Yuan 3,092/t excluding the 13% VAT, higher by another Yuan 10/t or 0.3% from the previous month. Even though coke prices softened somewhat last month, prices of imported iron ore had increased further, Mysteel Global notes.
Mysteel SEADEX 62% Australian Fines index averaged $125/dmt CFR Qingdao in February, higher by another $2/dmt on month, while the price of class 2 metallurgical coke in North China under Mysteel's assessment registered Yuan 2,689/t on average, down Yuan 43/t from the previous month, according to the survey.
Although domestic steel prices recovered overall in February, the growth was limited as demand from end-users was not as strong as expected.
For example, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 4,290/t including the 13% VAT on average last month, higher by Yuan 38/t from January.
The daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the country's 237 traders under Mysteel's tracking only averaged 134,423 tonnes/day over February 6-28 when Mysteel resumed the survey after the Chinese New Year holiday. The result was well short of the usual 200,000 t/d average during the periods of normal sales, indicating the limited trading activities in the physical market during that period.
Source:Mysteel Global
