China's blast furnace mills' rebar margins up in Sept'21

For September, average rebar margins among China's 91 blast-furnace steel mills under Mysteel's monthly survey gained substantially by Yuan 393/tonne ($61/t) on month to Yuan 801/t, which outpaced the gain of Yuan 110/t or 3.4% on month in their molten iron cost to Yuan 3,370/t excluding the 13% VAT on average, according to the latest data.

The rebound in their production cost after the declines in the prior two months was mainly due to higher coke price, as that of class 2 metallurgical coke in North China averaged Yuan 3,821/t last month, or up for the second month and at a faster pace of Yuan 834/t on month against the on-month growth by Yuan 277/t for August, resulting in the rise in production cost despite the softening in imported iron ore prices, the survey showed.

Mysteel SEADEX 62% Australian Fines, for example, declined for the third month by September to $117/dmt CFR Qingdao on average, or down another $41/dmt on month, while China's national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 5,599/t including the 13% VAT as the September monthly average, or up Yuan 279/t on month on the support of lower output while better demand from the sectors such as construction on pleasant weather.

Last month, integrated steelworks and rolling mills in the regions such as North China's Hebei, East China's Jiangsu, Southeast China's Fujian, and Southwest China's Yunnan, had to trim or suspend their steel production mainly about longs with their local authorities' power rationing on power-intensive enterprises, as flats had still been enjoying higher margins in spite of the catch-up by longs, Mysteel Global noted.

For September, medium plate margins among the 91 steel mills, for example, averaged Yuan 913/t, despite the on-month gain at Yuan 165/t, or less substantial than rebar, according to Mysteel's tracking.

The average margins for hot-rolled coil (HRC) sales among the 91 Chinese producers was at Yuan 819/t despite the on-month decline by Yuan 33/t, mainly as China's domestic price of Q235 4.75mm HRC averaged Yuan 5,800/t including the 13% VAT for September, or up merely Yuan 51/t on month, Msyteel's survey showed.

By the last week of September, rebar output among China's 137 rebar producers across China, thus, decreased for the fourth week in a row towards its 19-month low, or totalling 2.48 million tonnes/week, down 25.8% on month, as reported.

Written by Nancy Zheng, zhengmm@mysteel.com

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