Posted on 30 May 2023
Billet prices in Tangshan in North China's Hebei province continued to lose ground during May 22-28, as market participants became more pessimistic after seeing the slump of steel futures prices last week, Mysteel Global learned.
As of May 28, Mysteel's assessment of the Q235 billet price in Tangshan settled at Yuan 3,300/tonne ($467.2/t) EXW and including the 13% VAT, lower by Yuan 100/t from May 21, and the price also hit a new low since October 9 2020.
Billet makers suffered larger losses on the price drop, with the average loss borne by the 10 integrated mills in Tangshan under Mysteel's coverage widening to Yuan 89/t as of May 26, although the average cost these mills incurred on producing the semis also dropped Yuan 39/t on week to Yuan 3,389/t over May 18-24.
The negative margins prompted both billet makers and re-rollers to rein in their production last week, Mysteel's survey showed.
Over May 19-25, daily billet production among the 30 steelmakers in Tangshan under Mysteel's tracking had dropped 2,500 tonnes/day or 5.3% on week to hit a 10-week low of 44,500 t/d, though during the same period the average capacity utilization rate of the 126 blast furnaces at local mills under Mysteel's monitoring had increased by 0.73 percentage point on week to 77.7%.
Meanwhile, the billet consumption among the 55 re-rollers in Tangshan under Mysteel's survey averaged 53,500 t/d over May 18-24, lower by 1,600 t/d or 2.9% on week. As of May 24, total billet inventories held by these mills had dropped 7,500 tonnes on week to 373,500 tonnes.
On the other hand, some re-rollers increased their procurement of semis materials late last week because their billet stocks were too low, Mysteel Global learned, and this led to the decline in retailer's billet stocks.
As of May 25, total billet inventories across the four commercial warehouses and two ports under Mysteel's monitoring had fallen for the second straight week by another 38,100 tonnes or 4.1% on week to 884,600 tonnes.
Source:Mysteel Global
