Posted on 07 Nov 2023
Mysteel's assessment of the Q235 150mm billet price in North China's Tangshan climbed by a further Yuan 70/tonne ($9.6/t) from October 29 to reach Yuan 3,550/t EXW including the 13% VAT as of November 5, according to Mysteel's latest survey. Though the rise mainly reflected improved market sentiment following Beijing's announcement regarding new stimulus policies, both demand and production of billets were generally weak during the week, survey participants said.
Chinese steelmakers saw their losses on billet sales narrow last week as the rise in prices of semis outpaced that of their production costs, with the average cost on billet production being borne by the ten integrated mills in Tangshan under Mysteel's tracking growing by a small Yuan 10/t on week to Yuan 3,724/t including the 13% VAT last week. On the other hand, the average loss they endured on selling semis narrowed by Yuan 60/t on week to Yuan 184/t on November 3.
On the supply side, more blast furnaces in Tangshan were idled for maintenance last week, with the capacity utilization rate of the 89 local blast furnaces monitored by Mysteel falling by 1.45 percentage points on week to a 2.5-month low of 87.8% over October 27-November 2.
Accordingly, the daily billet output among the 30 steelmakers in Tangshan quizzed by Mysteel declined by 9,500 tonnes/day on week to 36,500 t/d over the same period, a three-month low.
As for billet demand, the daily consumption of billets by the 55 re-rollers in Tangshan that Mysteel checks slumped by 20,800 t/d on week to just 33,000 t/d on average over October 26-November 1, also hitting a three-month low. The plunge reflected the fact that re-rollers had been ordered to suspend production due to heavy air pollution over the city, survey respondents said.
The re-rollers also slowed their pace of purchasing the semis last week. Mysteel's data showed that total billet stocks across the four commercial warehouses and two ports in Tangshan monitored by Mysteel mounted by a large 66,500 tonnes on week to hit a seven-month high of 1.22 million tonnes by November 2.
In addition, the stocks of billet at the sampled 55 re-rollers grew for the third week, rising by 64,000 tonnes on week to a near three-month high of 447,700 tonnes as of November 1.
Source:Mysteel Global
