Posted on 16 May 2023
The losses that China's blast-furnace steel mills have been suffering when selling rebars swelled further in April, mainly due to the sharper fall in spot prices, new Mysteel data show. The mills' production costs fell slightly however, in tandem with the decrease in steelmaking raw materials prices.
Mysteel's latest monthly survey among the 91 sampled blast furnace steel producers nationwide showed that their average loss on rebar sales reached Yuan 137/tonne ($20/t) last month, deepening by Yuan 88/t from that for March.
For April, the surveyed mills' losses on sales of hot-rolled coil (HRC) also jumped to Yuan 94/t on average, as against a profit of Yuan 26/t for the prior month, according to the survey.
Chinese finished steel prices fell steadily last month, reflecting the poor performance of demand among users and the negative sentiment in the domestic market, Mysteel Global noted. The steelmakers' profit margins shrank as a result.
For example, the national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 3,877/t including the 13% VAT as of April 28, sliding by Yuan 415/t from the end of March. Among flat products, the national price of Q235 4.75mm HRC under Mysteel's assessment dropped by Yuan 417/t on month to Yuan 4,006/t including the VAT.
Last month, 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 registered 163,552 tonnes/day on average, down 8,477 t/d or 4.9% on month, and far below the average of more than 200,000 t/d considered usual for March-April, normally peak months for steel consumption in China.
In April, the cost for making hot metal among the 91 surveyed mills reversed down to Yuan 2,921/t excluding the 13% VAT after the rise during March, easing by Yuan 175/t or 5.7% on month with the lower prices of major steelmaking raw materials.
The data show that the Mysteel SEADEX 62% Australian Fines index declined by $12/dmt on month to $115/dmt CFR Qingdao on average in April, while the price of second grade metallurgical coke in North China under Mysteel's assessment came in at Yuan 2,479/t, down Yuan 209/t from the prior month.
Source:Mysteel Global
