Posted on 13 Oct 2023
China's blast-furnace steel mills suffered more losses on finished steel sales in September, according to the results of Mysteel's latest monthly survey among the 91 blast furnace steel producers under its tracking. Survey respondents mainly blamed these on further rises in their production costs.
In September, the sampled mills' losses on rebar sales came in at Yuan 152/tonne ($20.8/t) on average, deepening by Yuan 97/t from the average for August, and those on sales of hot-rolled coil averaged Yuan 91/t, as against the average Yuan 67/t profit the makers enjoyed in August, the findings showed.
Increasing production costs were the problem, with the cost of making hot metal among the 91 surveyed mills being assessed by Mysteel at Yuan 2,842/t excluding the 13% VAT last month, up for the third consecutive month by another Yuan 62/t or 2.2% from August.
Prices of iron ore increased in September, which offset the decline in mills' costs caused by the slight fall in prices of other steelmaking raw materials such as metallurgical coke.
During September, Mysteel SEADEX 62% Australian Fines index for iron ore averaged $120/dmt CFR Qingdao, up $12/dmt on month, while the price of second grade metallurgical coke in North China under Mysteel's assessment reached Yuan 2,123/t on average, lower by Yuan 9/t from the previous month.
Although China's finished steel prices recovered somewhat in September, the recovery was limited as demand from end-users failed to meet market expectations for what is traditionally a good month for steel sales, Mysteel Global noted.
For example, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 3,839/t including the 13% VAT on average in September, higher by Yuan 56/t from August.
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 regular survey averaged 148,530 tonnes/day, up 3,829 t/d on month, but still much lower than the average of more than 200,000 t/d for the peak season.
Source:Mysteel Global
