The profit margins enjoyed by Chinese blast-furnace steel mills saw some improvement in November, mainly thanks to the decrease in their production costs after the prices of some steelmaking raw materials declined, according to Mysteel’s latest monthly survey among the 91 sampled blast furnace steel mills.
Last month, the average profit on sales of hot-rolled coil among the mills under the survey reached Yuan 28/tonne ($4/t), a significant improvement compared with the average loss of Yuan 156/t in October, Mysteel Global notes. The surveyed mills also achieved an average profit of Yuan 36/t on selling medium plate last month, as against the loss of Yuan 90/t on average during the prior month.
Although the sampled mills still lost money on rebar sales in November, their average loss narrowed to Yuan 37/t from Yuan 82/t for the previous month, the survey showed.
The prices of some steelmaking raw materials such as coke decreased last month, reducing the domestic steelmakers’ production costs and improving their profitability, Mysteel Global learned.
For November, the cost for making hot metal among the 91 surveyed mills averaged Yuan 2,853/t excluding the 13% VAT, lower for the seventh straight month by another Yuan 37/t or 1.3% on month.
Last month, the price of class 2 metallurgical coke in North China reversed down to average Yuan 2,571/t, representing a fall Yuan 198/t on month after the rise during October, the survey showed. Also during November, the Mysteel SEADEX 62% Australian Fines index was assessed at $93.1/dmt CFR Qingdao on average, edging up $0.8/t from that for October.
However, steel output among domestic steel producers in November declined further, as demand from end-users slowed with the falling temperatures in northern China and the COVID-related restrictions of local authorities to combat the spread of the virus, Mysteel Global noted.
Mysteel’s other survey showed that daily crude steel output among the 247 BF mills and 85 electric-arc-furnace (EAF) steel mills nationwide under its tracking averaged 2.77 million t/d, down 113,400 t/d or 3.9% on month.
Last month, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel’s survey averaged 156,157 tonnes/day, down by a small 760 t/d from the previous month.
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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