Posted on 23 Sep 2024
The number of profitable steel mills in China has increased gradually over the past one month, mainly thanks to their lower production costs and the recovery in domestic steel prices.
Mysteel's latest weekly survey showed that as of September 19, the profit ratio among the 247 blast-furnace (BF) steelmakers nationwide under its regular tracking came in at 9.96%, up for the fourth consecutive week by another 3.9 percentage points on week, or higher by 8.66 percentage points from the recent low recorded in mid-August.
The continuous improvement in Chinese mills' profitability was partly due to the decrease in their production costs from the softer prices of major steelmaking raw materials such as iron ore and coke, Mysteel Global learned.
Over September 13-19, the average cost of making hot metal among the 114 Chinese mills monitored by Mysteel reached Yuan 2,586/tonne ($367/t) excluding the 13% VAT, down by Yuan 29/t on week or lower by Yuan 98/t on month.
On Thursday, Mysteel's SEADEX 62% Australian Fines was assessed at $92.3/dmt CFR Qingdao, lower by $2/dmt from one month earlier, while the national composite coke price under Mysteel's assessment witnessed an on-month fall of Yuan 164/t to reach Yuan 1,584/t including the 13% VAT.
Besides, China's finished steel prices recovered somewhat with the improved market sentiment, which also contributed to the rise in the number of profitable steel mills.
For example, the national price of HRB400E 20mm dia rebar, a pointer to domestic steel-market sentiment, was assessed by Mysteel at Yuan 3,376/t including the 13% VAT as of September 19, higher by Yuan 168/t from one month before.
Their improved profit margins encouraged some Chinese steel producers to ramp up production, leading to a slight growth in the country's total steel output, Mysteel Global noted.
Over September 12-18, total production of the five major steel items among the sampled mills under Mysteel's regular tracking registered 8.08 million tonnes, up by 3.7% on month. The five major steel products comprise rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC) and medium plate.
Source:Mysteel Global
