Posted on 29 Nov 2023
Billet prices in Tangshan in North China's Hebei province rose initially before subsequently trending downward over November 20-26, as demand for the semis weakened due to the imposition of production curbs on local re-rollers. Market sentiment also cooled in tandem with the retreat in steel futures prices, according to Mysteel's weekly survey.
As of November 26, the Q235 150mm square billet price in Tangshan, under Mysteel's assessment, had declined by Yuan 30/tonne ($4.2/t) on week to Yuan 3,630/t EXW and including the 13% VAT.
Daily billet consumption among the 55 re-rollers in Tangshan that Mysteel tracks averaged 48,500 tonnes/day over November 16-22, reversing down by 14,300 t/d on week. Billet demand had waned during the survey period after many re-rollers were ordered to suspend production to lessen air pollution.
Re-rollers mainly digested the billet in their yards during the week, and consequently, billet inventories held by the 55 sampled re-rollers thinned by 18,200 tonnes on week to 380,500 tonnes over November 16-22.
On the other hand, billet production decreased last week, with output among the 30 steelmakers in Tangshan under Mysteel's tracking averaging 44,000 t/d over November 17-23, down by 3,500 t/d on week, according to the survey. Local mills preferred to produce finished steel products rather than semis as they could enjoy better margins when selling the former, sources said.
The average losses on billet sales borne by the ten sampled integrated mills in Tangshan that Mysteel monitors stood at Yuan 133/t on November 24, deepening by Yuan 74/t on week, while the per-tonne cost the same mills incurred when producing those semis averaged Yuan 3,783/t, higher by Yuan 64/t on week.
The slow-down in re-rollers' procurement meant that total billet inventories across the four commercial warehouses and two ports in Tangshan that Mysteel checks grew by 64,500 tonnes on week to 1.28 million tonnes as of November 23, almost an eight-month high.
Source:Mysteel Global
