Posted on 19 Apr 2024
The number of profitable steel mills in China has increased steadily since the second half of March, and now about half of all Chinese steel mills are gaining some profits when selling their steel, thanks to their lower production costs and the recovery in finished steel prices, Mysteel Global learned.
Mysteel's latest weekly survey showed that as of April 18, the profit ratio among the 247 blast furnace mills nationwide under its regular tracking had increased to 48.48%, up for the fifth consecutive week by another 10.38 percentage points on week and marking the highest since last September.
One major reason for the improved profitability of the domestic mills was the continuous fall in their production costs. Over April 12-18, the average cost of making hot metal among the 114 Chinese mills monitored by Mysteel was assessed at Yuan 2,734/tonne ($378/t) excluding the 13% VAT, down by another Yuan 21/t from the previous week and touching the lowest since August 2023.
In parallel, China's finished steel prices in the physical market recovered gradually this month with the improved demand of end-users and the better performance of ferrous futures markets, Mysteel Global learned. This was cited as another reason for the improvement in the domestic steelmakers' profitability.
The national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment for example, was assessed by Mysteel at Yuan 3,805/t including the 13% VAT on April 18, higher by Yuan 214/t from the recent low on April 1.
Steel transactions in the physical market recovered further this month, as more end-users returned to the market for replenishment, and speculative demand also increased with the improved sentiment in the home market.
Over April 1-18, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 traders under Mysteel's regular survey averaged 162,760 tonnes/day, leaping by 40,965 t/d or 33.6% compared with the average for March.
Source:Mysteel Global
