SHANGHAI, Jun. 6 (SMM) – Profitability at Chinese steel mills would remain stable or even grow during June, Shanghai Metals Market’s ferrous branch Steelease foresaw.
Profits at the majority of domestic steel mills did not change significantly during May. Steelease data showed that the average profit for domestic hot-rolled rose from 87 yuan ($14) per tonne in April to 90 yuan per tonne in May, but profits for rebar fell from 188 yuan per tonne to 147 yuan per tonne.
Falling prices of raw materials and relatively stronger prices of steel products were mainly reasons behind such estimation.
In May, the price of domestic ore (66% Fe concentrate, dry basis) in Qian'an, Hebei province fell by 7.81%, while that of imported ore (PB 61.5% wet fines) at Qingdao port saw a drop of 7.64%, which should lower steel production costs during June, according to Steelease data.
Steel prices, however, outperformed iron ore prices during the same period. The national average price of rebar registered a monthly decline of 2.94%, and that of hot-rolled was down slightly by only 0.94%.