China’s top flat steel producers are primed for profit from a post-COVID-19 recovery in global manufacturing and goods demand in 2021, as well as from an emissions-cutting drive that will likely knock out high-cost competitors, sector analysts said
Prices for hot rolled coil (HRC) – flat steel rolled at high temperatures for use in cars, home appliances and machinery – has climbed 50% in the past six months as China’s manufacturers cranked to life after coronavirus lockdowns were lifted in mid-2020.
Profit margins of hot rolled coil in northern China Steel demand from manufacturing is improving significantly and the ferrous sector will have the biggest supply shortage since 2017, when supply-side reforms slashed steel mill capacities, analysts with CITIC Securities said in a note.
“Profits earned by steel firms are likely to hit a record this year,” said CITIC Securities.
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