Posted on 30 Jul 2024
Billet prices in Tangshan in North China's Hebei province decreased substantially last week, in tandem with the slide in Chinese steel futures prices amid the generally pessimistic market mood, according to Mysteel's weekly survey. The operational rate of local re-rollers stayed low and their strategy towards procurement of the semis was cautious, survey respondents said.
As of July 28, the Tangshan Q235 150mm square billet price under Mysteel's assessment had lost Yuan 120/tonne ($16.5/t) on week to reach Yuan 3,150/t EXW and including the 13% VAT.
On the supply side, billet production in Tangshan stayed largely stable last week, with daily output among the 25 steelmakers sampled by Mysteel averaging 43,200 tonnes/day over July 19-25, edging up by 1,000 t/d.
Meanwhile, the slump in prices of the semis expanded the losses borne by billet makers, despite the fall in production costs, with the average loss on billet sales endured by the ten integrated mills in Tangshan that Mysteel tracks deepening by Yuan 77/t on week to Yuan 183/t as of July 26.
The average per-tonne cost these mills incurred when producing the billets eased by Yuan 23/t on week to Yuan 3,353/t including the 13% VAT last week, according to the survey.
On the other hand, daily billet consumption among the 48 local re-rollers Mysteel follows rose by 8,500 t/d on week to average 45,300 t/d over July 18-24. A few re-rollers had resumed operations last week, which led to a modest increase in their capacity utilization rate, survey respondents noted.
Consequently, these re-rollers' billet inventories thinned by 22,400 tonnes from the previous week to settle at 320,000 tonnes as of July 24.
Moreover, as of July 25 billet stocks across the four commercial warehouses and two ports in Tangshan that Mysteel canvasses totalled 1.09 million tonnes, down 61,600 tonnes on week and ending the steady rise that began in late May.
Source:Mysteel Global
