Chinese Steel Mills to Enter Maintenance in Q4 on Persistent Losses, SMM Predicts

Oct 20, 2015 08:21 GMT   Source:SMM

SHANGHAI, Oct. 20 (SMM) – Chinese steel mills are expected to shut down in Q4 due to severe losses, Shanghai Metals Market predicts. 

“Profitability of steel products has worsened in September due to rising prices of raw materials and weak steel prices,” SMM points out. 

According to SMM data, the average loss of hot-rolled steel expanded to 376 yuan per tonne in September nationwide, up from 248 yuan per tonne in August. The rebar product reversed from a profit of 35 yuan per tonne in August to a loss of 127 yuan per tonne in September. 

SMM sees no turnaround in steel prices in Q4 in China’s domestic market due to poor demand.   

“Strong demand in this year’s September and October, a traditionally peak demand season, has failed to materialize, and what’s worse, steel demand in north China will wane in Q4 as winter turns colder,” SMM says. 

The export market has offered no support as well, SMM adds, unless Chinese suppliers cut offers further.