Posted on 11 Jun 2021
In the past two months, a close correlation has been observed among finished steel and steelmaking raw materials including iron ore and steel scrap in China, as the domestic steel mills, with the remaining healthy margins, have been maintaining both their high steel output and raw material consumption pattern.
Mysteel’s survey showed that rebar margins in blast-furnace (BF) steel mills averaged Yuan 417/tonne ($70/t) including 13% VAT by June 9, which was quite decent despite the sharp fall from over Yuan 1,000/t over April until mid-May, and even for electric-arc-furnace (EAF) mills, their rebar margins stayed positive at Yuan 190/t on average by June 9, also down from around Yuan 700-1,000/t until mid-May, according to Mysteel’s assessment based on current steel and raw materials prices.
Healthy steel margins, despite lower, showed that BF capacity utilization among China’s 247 steel mills inched up for the ninth week over May 29-June 3, up another 0.48 percentage point to 91.89%, and the EAF capacity utilization among China’s 71 steel mills still also stayed relatively high at 73.58% by June 3, against the usually 60% capacity engagement.
The country’s healthy steel margins and high steel output, thus, resulted in the steady consumption of not only iron ore but also scrap, and a close correlation has been observed among steel, iron ore, and scrap, and all of them experienced the similar trends in May, with price surges in the first half, and then slumps in the second half of last month.
Starting late May, both iron ore and steel scrap prices have been gradually recovering too together with domestic steel prices, and by June 9, Mysteel PORTDEX 62% Australian Fines in Qingdao recovered Yuan 174/wmt from May 26 to Yuan 1,467/wmt FOT and including 13% VAT.
The price of the 6-8mm common-grade carbon steel scrap in Zhangjiagang, East China’s Jiangsu province, under Mysteel’s assessment, also rebounded by Yuan 170/t from May 26 to Yuan 3,180/t by June 9, excluding the 13% VAT.
Source: Mysteel
Source:Mysteel Global
