Posted on 14 Feb 2023
Billet prices in North China's Tangshan continued to lose ground last week, mainly due to the growing supply from steel mills, Mysteel Global learned. Though local re-rollers also lifted their production, they remained cautious about restocking the semis given their high stocks of finished steel, market sources observed.
As of February 12, Mysteel's assessment of the Q235 billet price in Tangshan had lost Yuan 20/tonne ($2.9/t) on week to Yuan 3,970/t EXW and including the 13% VAT.
The prices were still under the pressure of high billet stocks held by retailers, Mysteel Global learned. Total billet inventories across the four commercial warehouses and two ports under Mysteel's tracking had increased for the sixth straight week to near a 10-year high of 1.5 million tonnes as of February 9, up by 70,000 tonnes on week.
Steelmakers further ramped up billet production last week, Mysteel's survey showed, with the daily average billet output among the 30 tracked mills rising 1,500 tonnes/day on week to 46,500 t/d over February 3-9, though during the same period the capacity utilization rate of the 126 blast furnaces in Tangshan under Mysteel's tracking dropped 1.45 percentage points on week to 74.8%
On the demand side, daily billet consumption among the 55 re-rollers under Mysteel's survey had increased by 5,800 t/d on week to 27,600 t/d over February 2-8, as more re-rollers resumed production after the Chinese New Year holiday break.
Meanwhile, with their post-holiday replenishment, total billet stocks cross the sampled 55 re-rollers had risen 18,000 tonnes on week to 536,000 tonnes as of February 8, Mysteel's data showed.
However, the re-rollers saw their finished steel stocks mount at yards, which discouraged them from further restocking the semis, according to a market analyst based in Tangshan, who noted that this was weighing on the billet prices.
Consequently, steelmakers continued losing money on selling billets. The losses on billet sales suffered by the 10 integrated mills in Tangshan under Mysteel's tracking averaged Yuan 94/t as of February 10, while the average cost they incurred on producing those semis had eased Yuan 28/t on week to Yuan 3,884/t including the 13% VAT over February 2-8.
Source:Mysteel Global
