Posted on 15 Aug 2022
The margins that China's blast-furnace steel mills earned on rebar sales improved somewhat in July, but the 91 Chinese BF steel mills sampled in Mysteel's latest monthly survey still lost money on selling bars last month, the latest data show.
Last month, the average gross loss on rebar sales that the sampled steelmakers incurred was assessed at Yuan 86/tonne ($12.8/t), a laudable improvement on the average Yuan 317/t they were losing in June. Also last month, the average loss that mills were incurring selling medium plate decreased to Yuan 28/t from the Yuan 195/t during the prior month, the survey showed.
The mills managed to shrink their losses substantially in July mainly because of the decrease in their production costs, principally those of steelmaking raw materials including iron ore and coke, with the costs for making molten iron among the 91 surveyed mills averaging Yuan 2,960/t excluding the 13% VAT, down for the third straight month by another Yuan 315/t or 9.6% on month.
For July, Mysteel SEADEX 62% Australian Fines came in at $107/dmt CFR Qingdao on average, falling by $23/t from that in June, while the price of class 2 metallurgical coke in North China posted a larger decline of Yuan 425/t on month to average Yuan 2,851/t, according to the survey.
However, the average loss that mills were incurring selling hot-rolled coil (HRC) actually deepened by Yuan 26/t on month to Yuan 287/t in July, due to the fall in market prices of this product, according to the survey.
For example, as of July 29, the national price of Q235 4.75mm HRC was assessed by Mysteel at Yuan 3,982/t including the 13% VAT, lower by Yuan 460/t from the end of June, while the national price of HRB400E 20mm dia rebar under Mysteel's assessment slipped by Yuan 200/t during the same period to Yuan 4,187/t including the VAT.
The improvement in mills' business performance encouraged some makers to lift their finished steel output recently, which in turn put some pressure on domestic steel prices as demand from end-users is not showing any significant recovery while summer drags on, Mysteel Global noted.
Over August 4-10, total output of the five major carbon steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate among the steelmakers sampled under Mysteel's weekly survey grew for the second week by another 1% on week to 9.06 million tonnes, as reported.
Last month, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese traders under Mysteel's tracking averaged 154,190 tonnes/day, down 1,770 t/d from the average for June.
Source:Mysteel Global
