Steel rebar futures were trading around CNY 3,105 per ton, hovering near a two-week low as profitability in China’s steel industry continued to worsen. Industry data showed that only about 30% of steelmakers were profitable as of September 4, down from 32.5% a week earlier and 61% in the same period last year.
At the same time, China’s blast furnace utilization rate fell by 0.48 percentage point from the previous week to 89.08%, while average daily pig iron output declined by 5,200 mt to 2.4028 million mt.
Despite these weak fundamentals, investors anticipate an improvement in steel consumption on the back of seasonal demand during the peak construction period in September.
In other developments, China Mineral Resources Group, the state-owned iron ore importer, has reportedly instructed several steel mills to refrain from purchasing Rio Tinto Group’s Pilbara Blend ore.