Mysteel: China's Dec daily finished steel output off 1.4%
Daily output of the five items – comprising rebar, wire rod, medium plate, and hot-rolled, and cold-rolled coils – is expected to edge down by 24,000 tonnes/day or 1.4% on month to 1.69 million t/d, according to respondents. By product, wire rod would see the sharpest decline in daily finished steel output, losing some 11,000 t/d on month.
“Trading volumes of finished steel in both the domestic and global markets remained weak in November. Most steelmakers are earning meagre profits, and some electric arc furnace producers, re-rollers and HRC makers were even operating at a loss (so) some have slowed down production,” the survey’s coordinator said.
Among the 91 blast furnace steelmakers that Mysteel regularly canvasses, the average profits the mills were making on their rebar sales last month decreased by Yuan 709/tonne ($102.6/t) on month to Yuan 320/t. Worse, their margins on HRC plunged by Yuan 504/t on month to a result in an average loss of Yuan 35/t, the survey found.
At the same time, some steelmakers in North China have been experiencing snowfalls and freezing weather since November, and the combined effect of feeble profits and lukewarm demand has led some steelmakers to schedule maintenance stoppages this month or just halt production completely.
Anshan Yuanxin Iron and Steel Co, an EAF steelmaker in Northeast China’s Liaoning province, decided to cease normal operations on its two 40-tonne furnaces beginning December 3 and carry out maintenance because of mounting losses on its long products. When the enterprise will resume production remains unclear, according to a market watcher close to the company.
Meanwhile, the survey also found that the rolling capacity utilization rate among those surveyed producers is seen dropping by 1.1 percentage points on month to 74.3% for December.
It also suggested that the mills’ export orders this month would see a significant increase, jumping by 14 percentage points from November as the appetite of steelmakers for shipping abroad has undergone significant improvement given the erosion of domestic steel prices. Mysteel’s national average price for HRB400 20mm dia rebar had retreated by a large Yuan 603/t on month to Yuan 4,037/t including the 16% VAT as of December 10.
Last month, daily output of the five steel products among the surveyed mills remained essentially steady at 1.71 million t/d while the rolling capacity utilization rate among the surveyed mills also remained stable on month at 75.4%. Export orders last month also picked up just 1.1% on month.
Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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