Posted on 05 Sep 2023
Prices of semis in Tangshan in North China's Hebei province under Mysteel's assessment rose further over August 28-September 3, mainly due to improved market sentiment and the uptrend in finished steel prices, market watchers said.
By September 3, the Q235 billet price in Tangshan had climbed by larger Yuan 70/tonne ($9.6/t) on week to reach Yuan 3,580/t EXW and including the 13% VAT, according to Mysteel's assessment.
Against the backdrop of stronger stimulus measures in more major Chinese cities to bolster the property sector, sentiment in the country's steel market improved during last week, with both spot and futures prices of rebar strengthening on week. This rise in finished steel prices lifted semis price in tandem, market sources noted.
For example, on the Shanghai Futures Exchange, the most-traded rebar contract for next January delivery closed the daytime trading session at Yuan 3,813/t on September 1, leaping by Yuan 75/t or 2.01% from August 25's settlement price.
Thanks to the rebound in semis prices, losses on billet sales suffered by local steelmakers showed signs of improving, with the average loss endured by the ten integrated mills in Tangshan under Mysteel's tracking registering Yuan 29/t on September 1, as against the prior week's average loss of Yuan 48/t.
Over August 24-30, the per tonne cost incurred by these mills when producing semis averaged Yuan 3,599/t, up by just Yuan 1/t on week.
As such, steelmakers ramped up their production pace for semis last week, with daily billet output among the 30 mills under Mysteel's coverage rebounding to 54,200 tonnes/day over August 25-31, higher by 7,200 t/d or 15.3% on week.
Meanwhile, the capacity utilization rate among the 89 blast furnaces in Tangshan under Mysteel's tracking also inched up by 0.05 percentage points on week to average 89.7%.
For their part, however, Tangshan's re-rollers were less hungry for semis during the week, mainly due to the production curbs imposed on them by local authorities to reduce air pollution.
Over August 24-30, total billet consumption among the 55 re-rollers under Mysteel's tracking had decreased for three straight weeks, plunging by 22,900 tonnes/day or 40.5% on week to average 33,600 t/d.
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 remains pending.
During the same August 28-September 3 period, total billet inventories held by these re-rollers rose further by another 13,800 tonnes or 3.3% on week to 432,800 tonnes, Mysteel's survey showed.
By August 31, total billet stocks across the four commercial warehouses and two ports in Tangshan that Mysteel monitors had also climbed higher on week to top 660,400 tonnes, up by 41,200 tonnes or 6.7% on week.
Source:Mysteel Global
