Steel Mills Profits to Hover at Lows in Apr but to Pick up in H2 2023

SHANGHAI, Apr 11 (SMM) - According to SMM estimation, profits of rebar produced by BF mills in east China stood at 35 yuan/mt as of Mar 31, up 50 yuan/mt from the end of February. Profits of rebar produced by EAF mills were -118 yuan/mt, down 34 yuan/mt. In March, the active production resumption of domestic BF and EAF mills rapidly hiked up the raw material prices. In the first half of March, steel prices ballooned amid the brief surge in terminal consumption, slightly driving up the profits of steel mills. In the second half of the month, steel prices fell, and the profits of mills, especially the EAF mills, shrank. In April, ferrous metals prices will move with some downward potential, and the steel mills’ profit margins will hover at lows.

uIn the long run, the supply of iron ore, coke, and steel scrap in China in 2023 will all increase compared with 2022, while the raw material consumption by steel mills will remain stable or may decrease amid the production restriction. In the second half of 2023, the profits of BF mills are expected to pick up first, and those of EAF mills will  also grow slightly.