Posted on 29 Aug 2023
A tightening of availability during the week of August 21-27 led prices of billet in Tangshan in North China's Hebei province under Mysteel's assessment to recover slightly from the previous three weeks of losses, market watchers observed.
As of August 27, the Q235 billet price in Tangshan had rebounded to Yuan 3,510/t ($481.2/t) EXW and including the 13% VAT, recovering by a small Yuan 10/tonne on week, according to Mysteel's assessment.
Due to their rising production costs and thinner profit margins when selling billet, steelmakers slowed their pace of producing semis last week, with daily billet output among the 30 mills under Mysteel's coverage retreating from the three weeks of gains to average 47,000 tonnes/day over August 18-24, down by 1,900 t/d or 3.9% on week.
As of August 25, the average loss on billet sales suffered by the ten integrated mills in Tangshan under Mysteel's tracking was Yuan 48/t, against the prior week's loss of Yuan 36/t.
Meanwhile, the per tonne cost incurred by these mills when producing the semis averaged Yuan 3,598/t over August 17-23, higher by a larger Yuan 32/t on week.
During the same period, the capacity utilization rate among the 89 blast furnaces in Tangshan operated by mills under Mysteel's tracking grew by another 1.45 percentage points on week to average 89.65%.
On the demand side, most re-rollers still held a cautious stance about replenishing semis during the survey period and had limited their acceptance of high-priced billet, one source pointed out.
Over August 17-23, total billet consumption among the 55 re-rollers under Mysteel's tracking averaged 56,500 tonnes/day, falling further by another 3,300 t/d or 5.5% on week.
Meanwhile, total billet inventories held by these re-rollers had mounted by 20,700 tonnes or 5.2% on week to 419,000 tonnes as of August XX, Mysteel's survey showed.
Besides, the production curbs recently imposed on re-rollers by the Tangshan city government aimed at lowering atmospheric pollution levels may further dampen their semis consumption in the short run, the source added.
Earlier on August 24, all steel re-rollers in Tangshan's Fengrun district were required to halt reheating and rolling operations, as Mysteel Global reported, and when the constraints will be lifted is still unknown.
As of August 24, total billet stocks across the four commercial warehouses and two ports in Tangshan that Mysteel monitors had also increased on week to reach 619,200 tonnes, up by 19,500 tonnes or 3.3% on week.
Source:Mysteel Global
