Healthy profits drive mills to produce more hot-rolled steel in Jul

SHANGHAI, Jul 4 (SMM) – Encouraged by high profit margins, many mills in China plan to step up production of hot-rolled steel products in July, SMM learned.

While overall profits dipped in June, hot-rolled steel profits at steel mills that used blast furnaces remained above 1,100 yuan/mt from the end of April. The average margin in June stood at 1,131 yuan/mt, SMM found. Profits of rebar and billet stood below 1,000 yuan/mt in June.

Hot-rolled production in July is expected to grow over 10% across four mills in east China as they return from maintenance works in June.

Currently, Shagang leads the increases with a gain of 23% from June as its rolling line resumed operation. It accepted fewer orders for July, from June, and plans to produce 825,000 mt of hot-rolled steel products this month. 

Cangzhou China Railway Equipment Manufacturing Materials plans to produce 630,000 mt of hot-rolled steel products this month, up 13% from June. Its blast furnace remains under maintenance while its converter has resumed operation. 

Ganglu Steel plans to produce 495,000 mt of hot-rolled steel products this month, up 10% from June. One of its 550 cubic metre blast furnace has resumed since mid-May, the mill’s steel supply has also returned to normal.

Rizhao Steel plans to raise production by 13% to produce 930,000 mt of hot-rolled steel products in July. This will be a record high for the mill.

Steel mills scheduled for maintenance have to cut production plans for July. This excludes Angang Steel in the north-east that plans to increase hot-rolled steel production by 6%.

In the north, Shougang will undertake maintenance later this month and will cut hot-rolled production by 7%.

Pangang in the south-west received a steady stream of orders for July but has to cut hot-rolled production by 12% to 263,000 mt as its 1,250 cubic metre blast furnace undergoes month-long maintenance from mid-July. This is likely to affect average daily molten iron output by some 3,000 mt.