China: BF mills’ profits continue to improve in Jun’25

• Falling iron ore, coke tags reduce production costs
• Finished steel prices witness milder downtrend

Mysteel Global: Chinese blast furnace (BF) steel mills saw their profit margins on finished steel sales improve further in June, mainly thanks to reduced production costs amid the falling prices of major steelmaking raw materials, according to Mysteel’s latest monthly survey among 91 BF mills nationwide.

Last month, the average profit on rebar sales among the sampled mills reached RMB 67/tonne (t) ($9.3/t), as against an average loss of RMB 1/t in May. Meanwhile, their profits on sales of hot-rolled coils (HRCs) jumped by RMB 86/t m-o-m to RMB 136/t on average in June, and those on sales of medium plate also increased by RMB 67/t m-o-m to average RMB 255/t, the survey results showed.

The reduction in production costs was the main driver for better profitability among integrated mills. For June, production costs of making rebar among the sampled BF steelmakers slipped by RMB 135/t m-o-m to average RMB 2,882/t, including 13% VAT, and those for making HRCs and medium plates also dropped by RMB 147/t and RMB 137/t, respectively, m-o-m to RMB 2,990/t and RMB 3,013/t, including VAT, according to the survey.

Prices of major steelmaking raw materials such as iron ore and coke generally lost ground last month, bringing down input costs for integrated steel mills, Mysteel Global learnt.

Mysteel’s SEADEX 62% Australian Fines index averaged $94/dry metric tonne (dmt) CFR Qingdao in June, falling by $5/t from the previous month, and the average price of second-grade metallurgical coke in North China posted a sharper m-o-m fall of RMB 136/t to RMB 1,169/t, the survey results showed.

While finished steel prices in China also headed lower in June due to lacklustre downstream demand in a seasonal summer lull – when high temperatures and frequent heavy rains across most regions of the country disrupt construction activities – the decrease in steel prices was milder than the reduction in mills’ production costs, contributing to their improved profit margins, Mysteel Global noted.

By the end of June, China’s national price of HRB400E 20-mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at RMB 3,211/t, including 13% VAT, down by RMB 19/t m-o-m, and that of Q235 4.75-mm HRCs slipped by RMB 25/t m-o-m to RMB 3,231/t, including VAT.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.