Posted on 18 Dec 2024
Chinese blast-furnace (BF) steel mills suffered losses on rebar sales in November, as domestic rebar sales prices fell sharply with the further shrinking of demand from end-users, according to Mysteel's latest monthly survey among the 91 BF mills under its tracking.
For November, the average loss on rebar sales among the sampled steelmakers reached Yuan 106/tonne ($14.6/t), representing a significant fall compared with the average profit of Yuan 16/t they could gain in October, the findings showed.
Chinese BF mills' margins on finished steel sales (Unit: Yuan/t)
Products | Nov | Oct | MoM |
Rebar | -106 | 16 | -122 |
HRC | 64 | 33 | 31 |
Medium plate | 90 | 58 | 32 |
Source: Mysteel
Domestic spot rebar prices lost ground last month with the slowing of steel demand in winter, as outdoor construction work in northern China became impacted by the cold weather, Mysteel Global noted.
By the end of November, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 3,445/t including the 13% VAT, lower by Yuan 186/t from the end of October.
Last month, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses under Mysteel's regular tracking reached 115,627 t/d on average, sliding by 5,680 t/d or 4.7% from the previous month.
Although domestic steel mills' production costs decreased somewhat in November with the decline in prices of major steelmaking raw materials such as iron ore and coke, the dip failed to offset the fast fall in rebar prices.
During November, the average cost of making hot metal among the 91 surveyed mills was assessed by Mysteel at Yuan 2,610/t excluding the 13% VAT, lower by Yuan 40/t or 1.5% on month.
Last month, the Mysteel SEADEX 62% Australian Fines index for iron ore averaged $102/dmt CFR Qingdao, down by $1/dmt on month, while the price of second grade metallurgical coke in North China under Mysteel's assessment slipped by Yuan 64/t on month to Yuan 1,736/t on average, the survey results showed.
However, the sampled mills achieved better profit margins on flat steel sales in November due to the mills' lower production costs, Mysteel Global learned. Also, the relatively steady demand meant the decrease in the sales prices of these products was limited.
Mysteel's survey shows that the average profit on sales of hot-rolled coil (HRC) among the sampled steel producers last month came in at Yuan 64/t, up by Yuan 31/t on month, and that on sales of medium plate also increased by Yuan 32/t on month to Yuan 90/t.
Encouraged by the healthy profit margins, many Chinese steel mills allocated more hot metal to producing flat steel items instead of longs in November.
Indeed, Mysteel's weekly survey showed that over November 21-27, HRC production among the 37 Chinese steelmakers under its tracking totalled 3.06 million tonnes, rising by 1% from one month earlier, while output of medium plate among the 37 sampled mills witnessed a sharper on-month rise of 6% to reach 1.53 million tonnes. During the same period however, rebar output among the 137 steel mills nationwide under Mysteel's regular tracking dropped by 6.3% on month to 2.28 million tonnes.
Source:Mysteel Global
