Chinese steelmakers began facing losses on sales in July

Blast furnace steel mills in China experienced significant losses in July 2024 due to falling steel prices amid unfavorable market conditions.

The average loss on rebar sales by Chinese steel mills was 249 yuan per ton (about USD 35 per ton), up 151 yuan per ton from June. Hot-rolled coil sales also turned unprofitable, with mills reporting an average loss of 150 yuan (USD 21) per ton in July, compared with a profit of 19 yuan (USD 3) per ton in June.

The widening losses were mainly due to lower steel prices, which fell further in the summer season amid lower demand from buyers. High temperatures and frequent rainfall across much of China further affected sectors such as construction, leading to lower demand for steel products.

In response to market conditions, many rebar mills and traders offered significant price cuts in July to stimulate sales and reduce inventories in anticipation of new rebar production and quality standards that will take effect on September 25.

Although Chinese steel mills saw a slight decline in production costs last month, it was not enough to restore profitability.