Profits of Steel Mills Improved in Light of Falling Costs

SHANGHAI, May 4 (SMM) - The falling iron ore prices, the fifth round of coke price cuts and dipping steel scrap prices dragged down the costs of steel mills last week. Although the finished steel prices declined, the profits of steel mills improved as the prices of raw material fell more rapidly. In the short term, the poor market sentiment caused by the falling steel prices will recover. In light of the improving market sentiment and China’s emphasis on expanding domestic demand, SMM believes that the steel prices will rebound post the Labour Day holiday and the profits will recover further as the raw material prices are still likely to dip.