China’s steel producers are expected to see an increase in profits in March from a month earlier due to increases in steel prices and the stabilisation of prices of raw materials since the beginning of last month.

After rising for several consecutive weeks, the average rebar price in 48 major markets stood at RMB 4322/t (US$686.87) at the end of March, despite of a minor fall of less than RMB 10/t ($0.62) from the previous week. Leading steel plants such as the Shagang Group, Yonggang Group, and Zenith announced their prices for late March and early April, intending to further raise prices by RMB 30-50/t ($4.47 – 7.94) for rebar and by RMB 100-120/t ($15.89 – 19.06) for steel wire. They have raised prices three times in a roll over the last month, the increase totalling RMB 100-300/t ($15.89 – 47.67).

The domestic steel market has bottomed out and was expected to improve seasonally along with increasing steel production. However, China still faces strong de-stocking pressure given the high level but slow decline of stocks.

Source: China Metals e-mail