Last month, the average loss on rebar sales among the sampled mills was Yuan 136/tonne ($18.7/t), easing by Yuan 16/t compared with that during September, while the same mills saw their average loss on sales of hot-rolled coil deepen by Yuan 68/t on month to Yuan 159/t, the mills’ responses show.
The sampled mills also suffered steeper losses on sales of medium plate last month, with the average loss reaching Yuan 125/t, compared with Yuan 75/t in September, the survey results indicated.
One major reason for Chinese mills’ persistent losses in October lay in their higher costs for production, Mysteel Global learned.
Last month, the cost of making hot metal among the 91 surveyed mills was assessed by Mysteel at Yuan 2,853/t excluding the 13% VAT, higher by another Yuan 11/t or 0.4% on month.
Although prices of iron ore declined slightly in October, the decrease failed to lower the domestic mills’ production costs as the prices of other steelmaking raw materials such as metallurgical coke increased significantly.
During October, Mysteel SEADEX 62% Australian Fines index for iron ore averaged $118/dmt CFR Qingdao, down $2/dmt on month, while the price of second grade metallurgical coke in North China under Mysteel’s assessment averaged Yuan 2,280/t, rising by Yuan 157/t from the prior month.
Chinese rebar prices recovered somewhat in October thanks to improved sentiment in the domestic market and healthier sales in the physical market. As of October 31, the national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 3,878/t including the 13% VAT, up by Yuan 37/t on month.
Throughout October, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 traders under Mysteel’s regular survey averaged 153,931 tonnes/day, higher by 5,401 t/d from the prior month.
However, domestic HRC prices lost ground last month, leading the Chinese steel mills to suffer more acute losses, Mysteel Global noted.
For example, the price of Q235 4.75mm HRC under Mysteel’s assessment came in at Yuan 3,878/t including the VAT as of October 31, lower by Yuan 47/t from one month earlier.
