Posted on 16 Aug 2022
The price of Q235 square billet under Mysteel's assessment in Tangshan in North China's Hebei province, the country's largest steel production hub, had marked the fourth successive on-week increase of another Yuan 60/tonne ($8.9/t) to Yuan 3,770/t EXW and including the 13% VAT as of August 12.
The price rise was mainly supported by the recovery of demand from end-users, as local re-rollers had been lifting their production in response to the rebound of finished steel prices, Mysteel Global learned.
Among 55 re-rollers in Tangshan surveyed by Mysteel, the daily consumption of billet averaged about 56,300 tonnes/day over August 4-10, posting a marked increase of 9,500 t/d or 20.3% on week.
Meanwhile, these re-rollers continued to replenish feed materials for their further resumption of production, since they had kept quite low billet stocks previously, according to a market analyst in Tangshan.
As such, total billet stocks across the sampled 55 re-rollers also registered a sharp rise of 86,500 tonnes or 38.1% on week to 313,500 tonnes as of August 10.
On the supply side, the gains in billet prices had helped steelmakers in Tangshan make some money, with the average profits on billet sales enjoyed by the 10 local integrated mills under Mysteel's survey standing at Yuan 89/t as of August 12, up Yuan 77/t on week.
Meanwhile, the average cost they bore on producing these semis lowered by Yuan 17/t on week to Yuan 3,681/t including the 13% VAT over August 4-10.
On the other hand, local mills continued to resume production, as the average capacity utilization rate of the 126 blast furnaces in Tangshan under Mysteel's monitoring gained another 1.3 percentage points from the previous week to 69.9% over August 5-11.
Nevertheless, production of billets reversed from prior week's growth over the same period, with daily output among 30 steelmakers in Tangshan under Mysteel's survey averaging 39,800 t/d, down 3,600 t/d or 8.3% on week.
Amid lower supply and stronger restocking demand from re-rollers, total billet inventories across four commercial warehouses and two ports in Tangshan tracked by Mysteel had fallen for the second week by another 99,500 tonnes or 8.4% to 1.1 million tonnes as of August 10.
Source:Mysteel Global
