【Iron & Steel】Analysis of Production Costs 

in Chinese Steel Mills in February 2024

(1) At the end of February, a survey of major Chinese blast furnace production enterprises revealed a decrease in their product production costs by 150 RMB/ton. Data shows that the current average tax-inclusive cost for rebar is 3841 RMB/ton, a decrease of 151 RMB/ton or 3.8%; for hot-rolled coil, the average tax-inclusive cost is 3961 RMB/ton, down by 143 RMB/ton or 3.5%; and for medium and thick plates, the average tax-inclusive cost is 4013 RMB/ton, with a decrease of 157 RMB/ton or 3.8%.  High power graphite electrodes are widely used in short process electric arc furnace steelmaking.

(2) At the end of February, research on a sample of Chinese blast furnace production enterprises showed that the current average cost of molten iron, excluding tax, is 2870 RMB/ton, a decrease of 70 RMB/ton or 2.4%.

(3) At the end of February, a study of some Chinese billet rolling material production enterprises revealed that the current average tax-inclusive rolling cost for rebar at steel mills is 3750 RMB/ton, down by 70 RMB/ton; with a profit of 10 RMB/ton, which is a decrease of 15 RMB/ton from the previous month.

(4) In February, the average price of the 62% iron ore index was $124, down $10 from the previous month; the average price for secondary metallurgical coke in the North China region was 2238 RMB/ton, down 105 RMB/ton from the previous month; the average tax-inclusive ex-factory price for Tangshan steel billets was 3581 RMB/ton, down 65 RMB/ton from the previous month.

(5) At the end of February, a survey of the profitability of some Chinese blast furnace production enterprises showed an average profit for rebar samples of -66 RMB/ton, an increase in profit of 96 RMB/ton from the previous month; for hot-rolled coil samples, an average profit of -16 RMB/ton, an increase of 79 RMB/ton; and for medium and thick plate samples, an average profit of -58 RMB/ton, an increase of 44 RMB/ton from the previous month. For more analysis on the operation of the steel market, feel free to contact us at any time.