Posted on 09 Apr 2025
The profit margins on finished steel sales earned by Chinese blast-furnace (BF) steel mills improved in March, mainly thanks to the significant fall in their production costs with the lower prices of major steelmaking raw materials, according to Mysteel's latest monthly survey among the 91 BF mills under its tracking.
During March, the average profits on sales of rebar among the sampled steel mills registered Yuan 51/tonne ($7/t) as against the loss of Yuan 25/t over the previous month.
The sampled steelmakers achieved better profits on flat steel sales last month, with the average profit on sales of hot-rolled coil (HRC) rising by Yuan 95/t on month to reach Yuan 133/t, the findings showed. That on sales of medium plate posted a sharper on-month rise of Yuan 130/t to average Yuan 260/t.
Chinese BF mills' margins on finished steel sales (Unit: Yuan/t)
Products | Mar | Feb | MoM |
Rebar | 51 | -25 | 76 |
HRC | 133 | 38 | 95 |
Medium plate | 260 | 130 | 130 |
Source: Mysteel
The better profitability of domestic BF steel producers was mainly attributed to the continuous fall in their production costs, Mysteel Global learned, as prices of major steelmaking raw materials including iron ore and metallurgical coke declined by varying degrees in March.
Last month, the average cost of making hot metal among the 91 surveyed mills was assessed by Mysteel at Yuan 2,477/t excluding the 13% VAT, representing an on-month fall of Yuan 81/t or 3.2%.
During March, Mysteel SEADEX 62% Australian Fines index for iron ore averaged $102/dmt CFR Qingdao, slipping by $4/dmt from the prior month. At the same time, the price of second-grade metallurgical coke in North China reached Yuan 1,316/t on average, falling by Yuan 114/t on month, according to Mysteel's assessment.
The healthy profit margins and the expectations for a recovery in steel demand in March led some domestic steel mills to ramp up production, causing their finished steel output to increase gradually.
Mysteel's other survey showed that over March 20-26, total production of the five major steel items comprising rebar, wire rod, HRC, cold-rolled coil (CRC) and medium plate came in at 8.7 million tonnes, higher by 3.2% on month.
Steel inventories held by Chinese traders declined steadily in March thanks to the replenishment of end-users, with the total tonnage of the five major steel items at traders' warehouses in the 132 cities under Mysteel's tracking reaching 19.9 million tonnes as of March 27, lower by 8.3% from one month earlier.
However, China's finished steel prices weakened overall last month, as the recovery in steel demand failed to meet market expectations, 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 3,342/t including the 13% VAT as of March 31, down by Yuan 99/t from the end of February. During the same period, the national average price of Q235 4.75mm HRC under Mysteel's assessment slipped by Yuan 41/t to Yuan 3,404/t including the 13% VAT.
Source:Mysteel Global
