Posted on 10 Jan 2023
After China's New Year's Day holiday, billet prices in North China's Tangshan slid at first due to weak demand among re-rollers before rebounding on stronger sentiment late last week, market sources observed.
Mysteel's assessment of the Q235 billet price in Tangshan lost Yuan 20/tonne ($2.9/t) from January 3 to settle at Yuan 3,730/t EXW and including the 13% VAT as of January 5.
The daily consumption of billets among the 55 re-rollers in Tangshan under Mysteel's survey slumped 12,200 tonnes/day or 23% on week to 40,800 t/d over December 29-January 4, as local re-rollers reined in production amid their high stocks of finished steel.
Meanwhile, total billet stocks among the sampled 55 re-rollers stood largely stable during the survey period, rising only 2,500 tonnes or 0.7% on week to 346,500 tonnes as of January 4, according to Mysteel's tracking.
Retailers' billet stocks mounted as re-rollers slowed down their procurement of the semis, with the total inventories across four commercial warehouses and two ports in Tangshan Mysteel monitors rising 128,500 tonnes or 22.3% on week to 703,500 tonnes as of January 5.
On the supply side, some steelmakers in Tangshan curtailed production in response to their shrinking profit margins, Mysteel's survey showed, with the capacity utilization rate of 126 local blast furnaces falling 0.34 percentage point on week to average at 86.4% over December 30-January 5.
The 10 integrated steel mills in Tangshan under Mysteel's coverage suffered an average loss of Yuan 195/t on billet sales on January 6, while the average cost they incurred on producing those semis increased Yuan 7/t on week to Yuan 3,925/t including the 13% VAT over December 29-January 4.
In such circumstance, the daily billet output among 30 steelmakers in Tangshan under Mysteel's tracking dropped 8,500 t/d or 16.5% on week to 43,000 t/d as of January 5.
Nevertheless, the price of Q235 billet in Tangshang strengthened late last week, gaining Yuan 50/t from January 5 to reach Yuan 3,780/t on January 8, according to Mysteel's assessment.
Market sources attributed the price rebound to the announcement from China's central bank, the People's Bank of China, that it was adjusting domestic residential mortgage rates to promote housing sales, which brought optimistic outlook to China's real estate market and gave a strong boost to steel prices, Mysteel Global learned.
Source:Mysteel Global
