Profit margins of steel mills unlikely to improve as steel prices underperform raw material prices

Raw material prices appeared stable-to-strong last week. Finished product prices inched higher amid pick-up of market sentiment in the middle of last week. Under this circumstance, profits of steel mills stood low last week, seeing higher HRC profit than rebar one. Profit of HRC increased aggressively, while that of rebar remained stable. Looking ahead, as raw material price is still expected to be stronger than finished product price in a short run, it is expected that profits of steel mills will not improve significantly this week.