Posted on 24 Mar 2023
Billet prices in North China's Tangshan have been falling during the past few days, as demand from local re-rollers has weakened sharply due to wide-ranging production stoppages Mysteel Global learned.
As of March 22, Mysteel's assessment of the Q235 billet price in Tangshan had dropped by Yuan 100/tonne ($14.7/t) or 2.5% from March 19 to reach Yuan 3,900/t EXW and including the 13% VAT.
The price tumble has seen local steelmakers lose money on their sales of billet again after managing to glean some profits for the prior three weeks, Mysteel's survey showed.
As of March 22, the average loss suffered on billet sales by the ten integrated mills in Tangshan under Mysteel's tracking stood at Yuan 46/t, while over March 16-22, the average cost they'd incurred on producing those semis fell Yuan 43/t on week to Yuan 3,946/t including the 13% VAT.
Many re-rollers in Tangshan completely suspended production over March 20-22 under orders from local authorities there because air quality over the city had been forecast to worsen, according to a market analyst based in Tangshan. This caused billet demand to wane significantly, dragging billet prices lower, she added.
Over March 16-22, billet consumption among the 55 re-rollers under Mysteel's survey averaged just 44,600 tonnes/day, slumping 9,500 t/d or 17.6% on week.
Nevertheless, the production restrictions were lifted on the afternoon of March 22, and the re-rollers are procuring billets actively to replenish their feed materials, the Tangshan-based analyst noted.
As such, billet prices in the city are likely to rebound in the next few days thanks to the demand recovery, she predicted.
Source:Mysteel Global
