Posted on 15 Apr 2021
Profits among the 91 Chinese blast-furnace steel mills sampled as part of Mysteel’s monthly tracking grew sharply in March thanks to their reduced production costs and the significant increase in domestic steel prices.
Last month, the sampled mills’ profit margins on rebar averaged Yuan 466/tonne ($71.3/t), jumping by a huge Yuan 353/t from the prior month, according to Mysteel’s latest survey released on April 13. The sampled mills gained better profits from their sales of flat steel including hot-rolled coil and medium plates too, with those for the former up Yuan 568/t on month at Yuan 837 on average, and those for the latter jumping by Yuan 516/t from February to average Yuan 757/t.
One major reason for the healthy margins was the decrease in the mills’ steelmaking costs, the survey showed. For March, the molten iron cost among the 91 BF mills reversed down to Yuan 2,930/t excluding the 13% VAT, lower by Yuan 117/t on month and bringing an end to ten straight months of increases.
Last month, the price of secondary metallurgical coke in North China averaged Yuan 2,367/t, lower Yuan 330/t on month, Mysteel’s assessment showed. The drop offset some growth in the price of iron ore, where the Mysteel SEADEX 62% Australian Fines prices had recovered by $1.8/dmt from that for February to $166.5/dmt CFR Qingdao on average, according to the monthly report.
At the same time, domestic finished steel prices increased substantially in March on support of the further recovery in end-user demand and the production restrictions imposed on local steel mills in Tangshan in North China’s Hebei province.
As of March 31, the national price of HRB 400 20mm dia rebar, a bellwether of China’s steel-market sentiment, was assessed by Mysteel at Yuan 4,902/t including the 13% VAT, surging by Yuan 214/t from one month before. That of Q235 4.75mm hot-rolled coil posted sharper growth of Yuan 474/t on month to Yuan 5,341/t including the VAT.
Mysteel’s other survey among the 237 trading houses across China showed that their daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil in March averaged 205,358 tonnes/day against the February average of 57,727 t/d, indicating the fast recovery in consumption from end-users.
Source:Mysteel Global
