China BF mills' rebar margins squeeze in Sept

In September, China's 91 blast-furnace steel mills saw most of their steel margins further squeezed with rebar even posting a loss of Yuan 74/tonne ($11/t) on average, mainly because of the remaining high production costs while domestic steel price declines, according to Mysteel's latest monthly report.

For rebar, the representative of long steel products in China, its average margin among the sampled mills plunged by another Yuan 99/tonne on month into the negative zone last month, as their average molten iron production cost grew further by Yuan 10/t on month to Yuan 2,490/t excluding the VAT on average.

In September, steelmaking raw materials prices continued to hover high on the remaining robust demand from the Chinese steel mills, and Mysteel's SEADEX 62% Fe Australian Fines, for example, surged to a 6.5-year high of $130.75/dmt on September 3 then subsided, and its monthly average reached $123.5/dmt, still higher than the $122.1/dmt for August.

In the same month, China's national coke pricing index also grew by Yuan 74/t on month to Yuan 1,887/t including 13% VAT as of September 30, the country's national price of the HRB 400 20mm dia rebar, however, slipped by Yuan 102/t on month to Yuan Yuan 3,756/t by the end of September, according to Mysteel's data.

In September, China's domestic steel prices had been under pressure on the dampened market sentiment, as the domestic demand, though rather decent, but was not as robust as expected while China's steel producers had been reluctant to trim their output, Mysteel Global noted.

Rebar production, for example, totalling 3.74 million tonnes over September 24-30 among China's 137 long steel mills, or 6% higher on year, according to Mysteel's other survey.

As for flat steel, These mills' hot-rolled coil profit declined Yuan 142/t on month to just Yuan 21/t, as China's national price of the Q235 4.75mm HRC lost Yuan 137/t on month to Yuan 3,877/t including 13% VAT, according to Mysteel's assessment.

These mills' medium plate margin fell too by Yuan 74/t on month to Yuan 15/t, according to Mysteel's latest monthly survey.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

Photo: World Steel