Posted on 28 May 2024
Billet prices in Tangshan in North China's Hebei province trended upwards during the week of May 20-26, in step with the strengthening of rebar futures prices boosted by Beijing's newly announced macroeconomic measures, according to Mysteel's weekly survey.
As of May 26, the price of Q235 150mm square billet in Tangshan, a bellwether of domestic steel-market sentiment, had climbed by Yuan 60/tonne ($8.3/t) on week to Yuan 3,560/t EXW and including the 13% VAT, Mysteel's assessment showed.
Despite the growth in the local steelmakers' production costs, the rise in semis prices allowed the mills' profits on billet sales to widen, with the ten major mills in Tangshan that Mysteel checks seeing their average margin improve by Yuan 46/t on week to Yuan 79/t as of May 24.
Meanwhile, the per-tonne cost incurred by these mills when producing semis averaged Yuan 3,481/t including the 13% VAT last week, up Yuan 14/t on week, according to Mysteel's data.
In addition, daily billet production among the 25 mills in Tangshan under Mysteel's tracking grew by 4,000 tonnes/day on week to reach a four-month high of 47,500 t/d on average over May 17-23, as billet producers increased their supplies after billet prices rose last week.
On the other hand, daily billet consumption among the 48 local re-rollers Mysteel follows nudged down by 700 tonnes on week to average 51,000 t/d over May 16-22, indicating a small drop in billet demand with the capacity utilization rate of these re-rollers falling moderately.
As of May 22, billet stocks held by the re-rollers reversed down by 24,800 tonnes on week to 422,000 tonnes. As some re-rollers halted production for maintenance due to their deepening losses on finished steel sales, their procurement of the semis consequently declined and caused their yard stocks of billets to fall, the survey results suggest.
Moreover, total billet stocks across the four commercial warehouses and two ports in Tangshan that Mysteel monitors mounted by 6,600 tonnes on week to 775,900 tonnes as of May 23.
Source:Mysteel Global
