Chinese crude steel output hits record in May
14 Jun 2019 17:02 reported by Ivy Wei
Chinese crude steel output hit a new record in May, but the steel profit margins were dropping.
The prices of raw materials, particularly iron ore, were increasing which in return pushed down steel mills' profit margin. Chinese steel output had reached high levels in 2018 due to domestic strong steel demand. Chinese steel output would remain at a high level in the coming months.
The city of Tangshan extended anti-smog cutting on heavy industry to the end of June. However, the steel mills that were going to move out of the city would be exempted from the restrictions. Utilization rates at Chinese steel mills stayed as high as 71.13% in June.
On the other hand, the supply issues pushed the increasing of iron ore prices which in return cut sharply profit margins of steel mills.
The steel industry wasn't interested in a further reduction in steel production although steel margins dropped by more than 50% over the past two months for rebar steel.
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