Chinese blast furnaces faced significant financial losses in July 2024 due to a steep decline in rolled steel prices and weak market demand. According to a recent survey by Mysteel, the average loss from rebar sales among surveyed steel producers was 249 yuan per ton (approximately $35), marking an increase of 151 yuan per ton compared to June. Additionally, mills reported an average loss of 150 yuan per ton on hot-rolled coil sales, a stark contrast to the profit of 19 yuan per ton seen the previous month.
The downturn in profitability is attributed to a combination of seasonal factors, including low demand during the summer slump and adverse weather conditions that impacted construction activities.
Many rebar manufacturers resorted to significant price cuts to stimulate sales and manage inventory ahead of new production standards set to take effect on September 25. Despite a slight decrease in production costs, Chinese steel mills were unable to recover their profitability.
From January to July 2024, steel production in China decreased by 2.2% year-on-year, with July output dropping by 9.5% compared to June, reflecting ongoing challenges in the industry.
