Parties Over: As the growing margins, China's steel mill will hit for hard times


MANILA / BEIJING (Reuters) – China's Chinese steel maker lost for the first time in three months this month when prices were killed in a slow market on poor demand and supply near records, and # 39; Completing years of strong profit finances.

FILE AUDIO: A person works in front of a furnace at Steel Steel Special Ltd. in Dalian, Liaoning Division, China June 20, 2018. REUTERS / Stringer / File Photo

And with the economy of Àir. 2 the world cooling and its & # 39; addressing more and more emerging trade threats with the United States, China's steel builders are vulnerable to & # 39; Feeling worrying if Beijing launches new promotional measures, saying that there are traders and analysis.

Among tumbling prices, Chinese mills – which make the world's half-steel – a & # 39; earning costs by returning to a cheaper, lower-grade iron machine, in a way for minerals such as the Fortescue Australian Metals Group (FMG.AX).

China's steel production was 82.55 million tonnes in October, but since then China's steel prices and margins have resulted in China's determination of a winter hill that aimed at smogging and weakening the demand as cold weather leaving the construction sector.

"There have been scarce causes with strong demand and tight supply, which is not accessible in the long term," said Richard Lu, the CRU analyst. "This decline is not temporary but the beginning of a downward movement."

China's steel actors had been in party procedures since 2016 when prices were doubled as a strong foundation that emphasized demand, and be reinforced when the country's pollution campaign was blocked by produce.

Beijing also made 140 million tonnes of low quality steel appliances in 2017, equivalent to around 17% of the total output of that year.

The profit-making efforts amounted to 1,706 yuan ($ 246) per tonne for rehabilitation and 1,326 yuan for hot weather in December 2017 and stayed high this year, pushing mills to produce a product.

But when the demand began to sink this month, there were additional mills left with steel, reduced by sharper production hills this winter because China allowed departments to be a & # 39; setting their own product installments based on levels of release.

The price of China's regime – used in construction – has fallen by 21 per cent low of 3,496 yuan on a Monday morning from a seven-year higher toll in August, placed in a technical market.

FILE AUDIO: A machine is working on combining a branch of iron at Port Dalian, Liaoning area, China September 21, 2018. Photo taken 21 September, 2018. REUTERS / Muyu Xu / File Photo

The profit margins fell. Rebar's representatives were in the main city that was & # 39; made steel. Tangshan saw an edge to 297 yuan on a Monday tonight from 889 yuan in late October, according to data found by Jinrui Futures.

Hot coat makers (HRC) – used in manufacturing – lost this month for the first time since November 2015, Jinrui Futures said, is estimated at 130 yuan ($ 18.75) tonnes on November 21.

Tivlon Technologies, a steel steel firm and a Singapore-based engineer, expect HRC producers to lose 150 per cent per tonne in the second half of November compared to the loss of 200 yuan in the first half. The majority of garden representatives are at birth, according to Tivlon.


It is expected that there will be a reduction in additional steel prices, traders who are most likely to have been offset; filling over the winter ahead of the spring request; stock transfer, photo drawings to the lowest level this year.

"The risk of maintaining physical steel material at the moment is too high," said a deer trader from the large department of Liaoning in China who gave his surname as Wang. "The market usually believes that prices will only stop if steel mills are not voluntarily cutting results

Amongst weak steel prices, Chinese average mills used to decrease to 67.54 per cent the week that was following just three weeks ago, data showed Mysteel consultation.

Many high-iron mills had been welcomed to achieve the highest output with lower volumes, and also costing costs; using lower level content with iron content below 60 per cent.

The shift benefits miners such as Fortescue, which was set against high-level representatives such as Vale & Brazil (VALE3.SA).

"We have seen more demand recently with mills that get more 58% in response to the decline of steel margins," said Fortescue Chief Executive, Elizabeth Gaines, to Reuters by post- electricity.

The rate of 65 per cent iron branch fell to be delivered to China SH-CCN-IRNOR65 to 7-1 / 2-month low of $ 81 tonnes on Monday, and 58 percent per cent going to $ 36.50 , the most vulnerable from June SH-CCN-IRNOR58, according to SteelHome's consultation.

That was to cut a & # 39; Premium for high to $ 44.50, the smallest from March. In July, the main menu hit $ 54.70 when China's choice for clearer scales grew better for us to excel.

"If the edges are still falling, more mills will use iron-level mesh," said a mill manager in the south of China who is doing the both repaired and HRC.

($ 1 = 6.9397 Chinese yuan)

Statement by Manolo Serapio Jr. in Manila and Muyu Xu in Beijing; edited by Richard Pullin

On Standards:Thomson Reuters Trust Principles.
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