Posted on 13 Jun 2023
Billet prices in Tangshan in North China's Hebei province continued strengthening during June 5-11 as local re-rollers in the city were actively procuring billet to replenish their feed stocks, Mysteel Global learned.
As of June 11, Mysteel's assessment of the Q235 billet price in Tangshan had strengthened by Yuan 40/tonne ($5.6/t) from June 4 to reach Yuan 3,540/t EXW and including the 13% VAT, allowing more billet makers to enjoy healthy margins.
The average profit earned by the ten integrated mills in Tangshan under Mysteel's tracking had expanded significantly to Yuan 188/t by June 9, while the average per-tonne cost these mills had incurred on producing those semis had eased by Yuan 11/t on week to Yuan 3,352/t over June 1-7.
Re-rollers in Tangshan ramped up their billet restocking after seeing their semis inventories shrink and their sales of finished steel products rise, according to a market analyst based in Tangshan.
As of June 7, total billet inventories held by the 55 local re-rollers under Mysteel's coverage had slumped by 72,700 tonnes or 21.3% on week to 269,300 tonnes, a new low since early August 2022. Meanwhile, over June 1-7, billet consumption by these re-rollers averaged 54,200 tonnes/day, lower by 5,800 t/d or 9.7% on week, Mysteel's survey showed.
On the other hand, billet production in Tangshan declined as some steelmakers started maintenance on their blast furnaces last week, the Tangshan analyst noted.
Over June 2-8, the average capacity utilization rate of the 126 blast furnaces at the mills in Tangshan under Mysteel's monitoring had dropped 1.9 percentage point on week to 75.5%, while during the same period, billet output among the 30 local steelmakers under Mysteel's survey averaged 38,700 t/d, down 3,500 t/d or 8.3% on week.
Consequently, traders saw their billet stocks draw lower at an even faster pace, with the total inventories across the four commercial warehouses and two ports under Mysteel's monitoring falling for the fourth straight week by a large 161,100 tonnes or 21.4% on week to 590,600 tonnes as of June 8.
Source:Mysteel Global
