Posted on 11 Jul 2023
Billet prices in Tangshan in North China's Hebei province rose initially during July 3-9 but then dropped later to end up lower on week, as demand for the semis recovered among re-rollers, while market sentiment was dampened by cooling trade activity for finished steel products, Mysteel's survey showed.
As of July 9, the Q235 billet price in Tangshan had lost Yuan 30/tonne ($4.2/t) on week to reach Yuan 3,510/t EXW and including the 13% VAT, according to Mysteel's assessment.
Most re-rollers in Tangshan restarted operations at the beginning of last week after they had been forced to keep their production suspended during the previous week under local government orders, as Mysteel Global reported. This had led to a jump in billet consumption in Tangshan.
Over June 29-July 5, daily billet consumption among the 55 re-rollers in Tangshan under Mysteel's tracking averaged 48,400 tonnes/day, higher by a large 7,400 t/d or 15.2% on week.
The re-rollers replenished semis materials actively early last week, but the slow sales of finished steel products prompted them to tame their purchases, according to a market analyst based in Tangshan.
Consequently, as of July 5, total billet inventories held by these re-rollers had slumped 46,400 tonnes or 10.6% on week to 390,900 tonnes, Mysteel's survey showed.
"Traders and steel end-users generally held a wait-and-see stance after seeing rebar futures prices weaken late last week," the analyst explained. "This also made market participants more cautious about billet trading," she added.
On the other hand, billet supply increased slightly last week, with output among the 30 steelmakers in Tangshan under Mysteel's tracking averaging 50,300 t/d over June 30-July 6, up by 1,500 t/d or 3.1% on week.
During the same period, however, the average capacity utilization rate among the 126 blast furnaces under Mysteel's coverage had dipped 0.27 percentage points on week to 76.26% due to maintenance stoppages on some furnaces, the survey showed.
Billet makers still enjoyed healthy margins last week, as the average profit on billet sales earned by the ten sampled integrated mills in Tangshan under Mysteel's tracking stood at Yuan 156/t on July 7, while the per-tonne cost the same mills recorded when producing those semis averaged Yuan 3,394/t over June 29-July 5, lower by Yuan 11/t on week.
Despite the increase of billet output and the slowdown in re-rollers' procurement, traders' billet stocks decreased because the export volumes rose at ports, Mysteel Global learned. As of July 6, the total billet inventories across the four commercial warehouses and two ports in Tangshan that Mysteel monitors had dropped by 29,500 tonnes or 4.5% on week to 622,100 tonnes after rising during the previous two weeks.
Source:Mysteel Global
