- Scrap prices fall by RMB 11/t, rebar rises RMB 20/t w-o-w
- North, Southwest China mills bring idled furnaces back online
Mysteel Global: After retreating during the previous week, production among Chinese electric-arc-furnace (EAF) steel producers rebounded during 21-27 November, the results of Mysteel’s latest survey showed. A significant recovery in steel profits led the mills to boost production, Mysteel Global noted.
During the latest survey week, the average capacity utilisation rate among the 90 independent EAF steel producers under Mysteel’s regular tracking increased by 1.2 percentage points on week to reach 52.7%, while their average operational rate remained unchanged from the previous period at 69.1%.
Contributing the most to the production growth were mini-mills in North and Southwest China that brought idled furnaces back on stream during the week, leading to an increase of some 7,000 tonnes (t)/day in steel output on average among the sample mills, according to Mysteel’s assessment.
Meanwhile, some mills extended working hours after seeing their profit margins swell rapidly, thanks to the price trends of steel scrap and finished steel products moving in the opposite direction, Mysteel’s other survey showed.
As of 27 November, for example, the average loss on rebar sales incurred by the 64 independent EAF mills under Mysteel’s tracking was RMB 63/t ($8.9/t), significantly smaller than the RMB 114/t recorded a week earlier. Moreover, these mills could even enjoy an average profit of RMB 43/t when selling rebars that were made during the off-peak period for electricity consumption at night (when power costs are low).
By the same day, China’s composite steel scrap price had slipped RMB 11/t on week to RMB 2,407/t, while the country’s national spot price for HRB400E 20-mm diameter rebar climbed RMB 20/t on week to reach RMB 3,288/t, both including the 13% VAT, according to Mysteel’s assessment.
The improved margins are expected to encourage more mills to resume production or crank up operations in the coming week, further lifting the run rates among domestic EAF mills, Mysteel’s survey suggests.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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