Posted on 20 Feb 2023
After sliding during the prior two weeks, billet prices in North China's Tangshan rebounded last week, mainly driven by the strengthening of demand from local re-rollers who saw an improvement in their steel sales, market sources observed.
Mysteel's assessment of the Q235 billet price in Tangshan had gained Yuan 80/tonne ($11.6/t) on week to reach Yuan 3,870/t EXW and including the 13% VAT as of February 19.
With the transactions of finished steel recovering, re-rollers cranked up their production and procured more semis to replenish their feed materials, Mysteel Global noted.
The daily billet consumption among the 55 re-rollers under Mysteel's survey had soared by 28,900 tonnes/day or 104.7% on week to touch a more than five-month high of 56,500 t/d over February 9-15. Meanwhile, the total billet inventories across the sampled 55 re-rollers had also increased significantly by 133,000 tonnes or 24.8% on week to 669,000 tonnes as of February 15.
Regarding the supply, steelmakers in Tangshan ramped up production as semis demand grew, with the daily average billet output among the 30 mills under Mysteel's tracking rising 3,500 t/d on week to 50,000 t/d over February 10-16.
During the same period, the capacity utilization rate of the 126 blast furnaces in Tangshan under Mysteel's monitoring had gained 2.5 percentage points on week to 77.3%.
Under such circumstances, the accumulation of retailers' billet stocks slowed last week, though as of February 16 the total inventories in the four commercial warehouses and two ports under Mysteel's tracking had increased by a small 12,800 tonnes on week to 1.5 million tonnes.
The rise in billet prices helped steelmakers in Tangshan reduce the losses on billet selling, Mysteel Global learned. For example, the losses on billet sales suffered by the 10 integrated mills in Tangshan under Mysteel's tracking shrank by Yuan 69/t from the previous week to an average of Yuan 25/t as of February 17, while the average cost they incurred on producing those semis had edged up Yuan 11/t on week to Yuan 3,895/t including the 13% VAT.
Source:Mysteel Global
