SHANGHAI, Jun 10 (SMM) – According to estimates, profits of rebar at steel mills using BFs in April was 299 yuan/mt, a decrease of 128 yuan/mt from the previous month. Profits of hot-rolled coil was 751 yuan/mt, a drop of 188 yuan/mt on the month. The profit of rebar at the end of the month is actually near the breakeven point, and there was still a profit of 200-300 yuan/mt for hot-rolled products.
Profits surged before falling in May. Rebar profits exceeded 1,200 yuan/mt in May. The Surge in raw material prices in the first half of the month combined with inflation expectations pushed up steel prices. Daily gains in rebar prices stood at 600 yuan/mt. Steel prices fell in the second half of the month due to government intervention. On raw material costs, hot metal cost in May rose by 447 yuan/mt due to continued gains in iron ore prices, growing cost pressure for steel mills.
SMM predicts that the average monthly profit of steel mills may continue to decrease in June. Demand for steel from construction sites and automobiles weakened in June, and this is likely to lower steel prices. However, raw material prices of steel mills are also likely to drop, especially iron ore prices. Cost pressure of steel mills is likely to ease.
