Posted on 20 Dec 2022
Mysteel's assessment of the Q235 billet price in North China's Tangshan gained by Yuan 160/tonne ($22.9/t) on week to touch a five-month high of Yuan 3,810/t including the 13% VAT as of December 16, before receding to Yuan 3,760/t on December 18. Local re-rollers further ramped up billet procurement, while steelmakers still endured high costs in billet production overall, market sources observed.
Re-rollers were active in procuring billets last week to replenish low inventories, according to a market analyst based in Tangshan. The total billet inventories among the 55 local re-rollers in Tangshan under Mysteel's survey jumped 51,000 tonnes or 16.7% on week to reach 356,500 tonnes as of December 14.
As such, retailers' billet stocks continued to drop, with the total stocks across the four commercial warehouses and two ports in Tangshan under Mysteel's monitoring falling for the second straight week by another 78,300 tonnes or 18.4% to 346,200 tonnes as of December 15.
Meanwhile, the daily billet consumption among the sampled 55 re-rollers averaged 41,900 tonnes/day over December 8-14, staying unchanged from the previous week, Mysteel's survey showed.
Regarding billet supply, more steelmakers in Tangshan restarted their previously idled blast furnaces last week, leading the capacity utilization rate of 126 local blast furnaces under Mysteel's monitoring to rise 4.1 percentage points on week to 74.6% over December 9-15.
During the same period, the daily billet output among 30 steelmakers in Tangshan under Mysteel's tracking increased by 3,200 t/d on week to 50,400 t/d, a new high since early January this year.
However, local steelmakers were still unable to make money on billet selling last week, Mysteel's other survey showed.
For example, the 10 integrated steel mills in Tangshan under Mysteel's coverage suffered an average loss of Yuan 35/t on billet sales as of December 16, while the average cost they incurred on producing those semis increased Yuan 94/t on week to Yuan 3,845/t including the 13% VAT over December 8-14.
Source:Mysteel Global
