Posted on 30 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, rebounded during last week to reach Yuan 3,770/tonne ($546.7/t) EXW and including the 13% VAT as of August 28, Yuan 80/t higher on week.
"Re-rollers in Tangshan saw their profit margins continue to recover last week, so they lifted procurement of feed materials to prepare for the further resumption of production," a market analyst in Tangshan said, noting that growing demand from re-rollers gave a boost to billet prices.
Besides, futures prices of Chinese major ferrous commodities including rebar and hot-rolled coil strengthened through most of last week, which also buoyed semis prices, she added.
As local re-rollers continued to increase their purchase of semis, total billet stocks across 55 re-rollers in Tangshan under Mysteel's coverage had risen for the fourth consecutive week by another 69,000 tonnes or 18.1% on week to hit a three-month high of 451,000 tonnes as of August 24.
However, daily billet consumption of sampled 55 re-rollers reversed from the prior two-week rise by 400 tonnes/day to average 60,300 t/d over August 18-24, since production had yet to fully ramp up, Mysteel Global learned.
On the supply side, daily billet output among 30 steelmakers in Tangshan under Mysteel's tracking had declined for the third successive week by another 2,600 t/d or 6.7% on week to 36,300 t/d over August 19-25.
Over the same period, the average capacity utilization rate of 126 blast furnaces in Tangshan under Mysteel's monitoring nudged up 2.5 percentage points on week to 75.1%, nearing a two-month high because steelmakers had been cranking up production.
Amid lower output and growing replenishment demand, total billet inventories across four commercial warehouses and two ports in Tangshan under Mysteel's tracking had dropped for the fourth week by another 158,100 tonnes or 16.5% to 798,300 tonnes as of August 24, refreshing a two-month low.
The rebound in billet prices helped steelmakers in Tangshan contain their losses on billet selling, with the average loss suffered by 10 integrated mills under Mysteel's survey narrowing to Yuan 2/t as of August 26, though their average costs on producing semis increased Yuan 64/t on week to Yuan 3,772/t including the 13% VAT over August 18-24.
Source:Mysteel Global
