Posted on 24 Dec 2024
Billet prices in North China's Tangshan, the country's largest steel-producing hub, declined last week, in tandem with the softening of ferrous futures prices. Meanwhile, local re-rollers turned cautious about procuring the semis, given their high stocks of finished steel and poor steel margins, the findings of Mysteel's weekly survey suggest.
As of December 22, the Tangshan Q235 150mm square billet price had fallen by Yuan 60/tonne ($8.2/t) from that on December 15 to reach Yuan 3,040/t EXW and including the 13% VAT, Mysteel's assessment showed.
Steel re-rollers in Tangshan were being pressured by high finished-steel stocks and bleak steel sales, a survey respondent said, noting that over the past few days re-rollers had started maintenance stoppages. The production halts will likely lead to a drop in capacity utilization this week, Mysteel Global notes.
However, the respondent said that re-rollers' capacity utilization had not been affected last week and their demand for the semis had stayed largely stable. Over December 12-18, daily consumption of billet among the 44 re-rollers in Tangshan under Mysteel's tracking increased by a tiny 200 tonnes/day on week to average 54,100 t/d.
Re-rollers have been procuring semis very cautiously and are mainly digesting the billets at their yards, according to the survey. Total billet stocks across the sampled 44 re-rollers had thinned by 29,000 tonnes on week to 487,000 tonnes by December 18.
On the other hand, daily output of billets among the 23 steelmakers in Tangshan that Mysteel follows decreased by 7,000 t/d on week to average 44,800 t/d over December 13-19, as steelmakers curtailed billet production and produced finished steel such as hot-rolled coils instead.
Meanwhile, the average cost incurred by the ten mills in Tangshan which Mysteel checks had slipped slightly by Yuan 4/t on week to Yuan 3,136/t including the 13% VAT last week. However, the steeper fall in billet prices caused their average losses on billet sales to widen by Yuan 56/t on week to Yuan 96/t as of December 20.
As of December 19, total billet inventories across the four commercial warehouses and two ports in Tangshan that Mysteel monitors had thinned by a small 25,500 tonnes on week to 886,100 tonnes.
Source:Mysteel Global
