Posted on 18 Apr 2023
Billet prices in Tangshan in North China's Hebei province weakened for the second straight week over April 10-16 as cost support for the semis wavered at a time when re-rollers were also pressing steelmakers to lower the selling prices of the feeds, market sources observed.
As of April 16, Mysteel's assessment of the Q235 billet price in Tangshan stood at Yuan 3,740/tonne ($542.8/t) EXW and including the 13% VAT, lower by Yuan 60/t from April 9.
At the beginning of last week, leading steelmakers in Hebei and East China's Shandong announced their determination to cut their coke procurement prices by Yuan 50-100/t – their second so far this month – which brought down their overall costs for producing billets, according to a market analyst based in Tangshan.
Over April 6-12, the average cost incurred by the ten integrated mills in Tangshan under Mysteel's coverage had eased by Yuan 44/t on week to Yuan 3,808/t including the 13% VAT. However, by April 14 the average loss these mills were suffering had widened to Yuan 68 for every tonne of billet they sold.
Yet with their own profit margins narrowing further last week, the re-rollers in Tangshan cut their billet purchase prices further, the Tangshan-based analyst noted, while at the same time keeping their production at a fairly high level.
Daily billet consumption among the 55 re-rollers in Tangshan under Mysteel's tracking averaged 68,300 tonnes/day over April 6-12, lower by just 3,100 t/d or 4.3% from the previous week. As of April 12, total billet inventories among the sample re-rollers had increased slightly by 7,900 tonnes or 1.9% on week to 427,500 tonnes after falling during the previous four weeks, Mysteel's survey showed.
Steelmakers also reduced their billet production in response to the weakening prices, with the total billet output among the 30 mills in Tangshan under Mysteel's survey slumping 5,700 t/d or 10.3% on week to hit 49,300 t/d on average over April 7-13.
During the same period, however, the average capacity utilization rate of the 126 blast furnaces in the city monitored by Mysteel increased by 1.4 percentage points on week to reach 78.5%.
Consequently, local retailers' billet stocks continued to decline, with the total inventories in the four commercial warehouses and two ports under Mysteel's monitoring plunging by a large 170,800 tonnes or 16% on week to 896,400 tonnes as of April 13.
Source:Mysteel Global
