【Steel Industry】Survey on Production Costs 

and Profitability of Steel Mills

I. Production Costs and Profitability for Major Varieties in Long Process Steel Mills

At the end of February, the average tax-included cost of rebar from 91 blast furnace steel mills in China was 3,841 RMB/ton, a month-on-month decrease of 151 RMB/ton, or 3.8%, with a profit of -66 RMB/ton, an increase of 96 RMB/ton. The cost for hot-rolled coil was 3,961 RMB/ton, a decrease of 143 RMB/ton or 3.5% month-on-month, with a profit of -16 RMB/ton, an increase of 79 RMB/ton. For medium plate, the cost was 4,013 RMB/ton, down 157 RMB/ton or 3.8% month-on-month, with a profit of -58 RMB/ton, an increase of 44 RMB/ton. Graphite electrodes are an indispensable part of electric furnace steelmaking, primarily used to conduct electricity to melt scrap metal. Learn more in detail. 

For threaded steel, a survey of 51 threaded steel production enterprises in China at the end of February revealed an average cost of 3,841 RMB/ton, a decrease of 151 RMB/ton or 3.8% compared to the previous period. By region, the average cost of threaded steel in coastal areas for 20 steel mills was 3,823 RMB/ton, down by 166 RMB/ton or 4.2% month-on-month. In inland areas, the average cost for threaded steel in 31 steel mills was 3,849 RMB/ton, a decrease of 145 RMB/ton or 3.6% compared to the previous period. Regarding profitability, the profit margin for threaded steel production enterprises in February was -66 RMB/ton, increasing by 96 RMB/ton compared to the previous period.

For hot-rolled coil (HRC), a survey conducted at the end of February on 25 hot-rolled coil production enterprises in China revealed an average cost of 3,961 RMB/ton, representing a decrease of 143 RMB/ton or 3.5% compared to the previous period. Looking at different regions, the average cost of HRC for 12 steel mills in coastal areas was 3,940 RMB/ton, down by 156 RMB/ton or 3.8% month-on-month. In inland areas, the average cost for HRC in 13 steel mills was 3,971 RMB/ton, showing a decrease of 137 RMB/ton or 3.3% compared to the previous period. Regarding profitability, the profit margin for HRC production enterprises in February was -35 RMB/ton, marking an increase of 86 RMB/ton compared to the previous period.

II. Cost and Profitability for Adjusted Billet Rolling Steel Mills

By the end of February, our research on representative adjusted billet rolling steel production enterprises showed that the tax-included factory price of Tangshan billets averaged 3,646 RMB/ton, a decrease of 40 RMB/ton from the previous month. The tax-included cost of rebar was 3,750 RMB/ton, down 70 RMB/ton, with a profit of 10 RMB/ton, a decrease of 15 RMB/ton from the previous month.

III. Pig Iron Production Cost Situation in Blast Furnace Enterprises

By the end of February, our research on 25 blast furnace ironmaking enterprises revealed that the current ex-tax cost of pig iron was 2,870 RMB/ton, a month-on-month decrease of 70 RMB/ton, or 2.4%. Regionally, the ex-tax cost of pig iron in coastal area steel mills was 2,830 RMB/ton, down 75 RMB/ton or 2.6% month-on-month; in inland area steel mills, the cost was 2,900 RMB/ton, down 70 RMB/ton or 2.4%. For future market insights on steel mills, contact us to learn more.