Posted on 14 May 2024
Billet prices in North China's Tangshan city lost ground last week, in tandem with the softening of ferrous futures prices during the latter part of the week. Local re-rollers turned cautious about procuring the semis given their high stocks of finished steel, according to Mysteel's weekly survey.
As of May 12, the Tangshan Q235 150mm square billet price had lost Yuan 40/tonne ($5.5/t) from that on May 6 to reach Yuan 3,460/t EXW and including the 13% VAT, Mysteel's assessment showed.
Tangshan's re-rollers were being pressured by high finished steel stocks, a survey respondent said, noting that their demand for billet feeds weakened in tandem with the fall in capacity utilization.
Over May 2-8, daily billet consumption among the 48 local re-rollers under Mysteel's tracking plunged by a huge 25,400 tonnes/day on week to hit a 2.5-month low of just 32,100 t/d on average.
A few re-rollers purchased some semis at a low price during the survey week, and this led to a small accumulation in billet inventories at yards, according to the survey. Total billet stocks across the sampled 48 re-rollers had mounted by 62,200 tonnes on week to top 402,200 tonnes as of May 8.
On the other hand, daily output of billet among the 24 steelmakers in Tangshan that Mysteel follows increased by 6,400 t/d on week to average 45,500 t/d over May 3-9, a four-month high, as mills brought blast furnaces back to normal operation levels last week.
However, the average cost incurred by the ten mills in Tangshan which Mysteel checks rose further by Yuan 60/t on week to Yuan 3,444/t including the 13% VAT last week. Consequently, their average profit narrowed further by Yuan 90/t on week to just Yuan 26/t as of May 9.
By the same day, total billet inventories across four commercial warehouses and two ports in Tangshan had reversed down by 32,900 tonnes on week to 854,700 tonnes.
Source:Mysteel Global
