China’s raw materials producers are at the forefront of falling industrial profits as poor demand and price deflation tear into margins at steel mills, metals…
China’s raw materials producers are at the forefront of falling industrial profits as poor demand and price deflation tear into margins at steel mills, metals smelters, chemicals firms and coal miners.
While the pace of declines slowed in April across many sectors — in large part due to the base effect of comparing against last year when Shanghai was in lockdown — the weakening of profitability at coal mines worsened. Ferrous metals producers, which include the makers of steel for buildings and cars, were the worst performers on a monthly basis.
Australian coal continues to make inroads among Chinese buyers, adding to pressure on domestic prices, with new shipments climbing to their highest level since Beijing halted imports in the fall of 2020.
That ban ended at the start of this year and China’s appetite for the high-quality coal supplied by Australia is gaining momentum amid concerns that rising domestic production includes too much lower-grade fuel. Australian cargoes in April of mostly thermal coal for power plants surged 75% from the prior month to 3.89-million tons, according to Chinese customs data.