Posted on 26 Sep 2023
Billet prices in Tangshan in North China's Hebei province eased on week during September 18-24 as demand for both finished steel and semis weakened, market watchers observed. As of September 24, the Q235 billet price in Tangshan as assessed by Mysteel had reversed down by Yuan 20/tonne ($2.7/t) on week to Yuan 3,530/t EXW and including the 13% VAT.
Although September is traditionally a busy month for steel sales in China, steel demand in the country didn't recover as strongly last week as mills and traders had been expecting, market sources noted.
For example, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses under Mysteel's tracking averaged 146,437 tonnes/day over September 18-22, dropping by 5,886 t/d or 3.9% from the previous week.
The re-rollers cut their production as the trading volume of finished steel declined, a market analyst based in Tangshan commented. This, combined with their losses on selling finished steel products, prompted them to slow their procurement of billets, she explained.
Over September 14-20, total billet consumption among the 55 re-rollers under Mysteel's tracking plunged by 18,200 tonnes/day or 28.8% on week to average 44,900 t/d. Meanwhile, the total of billet inventories held by these re-rollers declined by 26,500 tonnes or 7.1% on week to 348,500 tonnes, Mysteel's survey showed.
Meanwhile, daily billet output among the 30 mills under Mysteel's coverage remained flat on week at 53,300 t/d over September 15-21. During the same period, the capacity utilization rate among the 89 blast furnaces in Tangshan under Mysteel's tracking eased by 0.54 percentage points on week to average 90.26%.
The mismatch between billet supply and demand last week also dragged down prices of the semis and deepened the mills' losses, the Tangshan-based analyst added.
On September 21, the losses on billet sales suffered by the ten sampled integrated mills in Tangshan under Mysteel's tracking averaged Yuan 32/t, while the per-tonne cost the same mills recorded when producing those semis averaged Yuan 3,562/t over September 14-20, higher by Yuan 10/t on week.
In parallel, total billet inventories across four commercial warehouses and two ports in Tangshan under Mysteel's tracking had climbed by 115,000 tonnes or 17% on week as of September 21 to reach 791,600 tonnes.
Source:Mysteel Global
