Posted on 19 May 2021
The Tangshan Q235 150mm square billet price, a representative price in China’s steel market, touched a record high of Yuan 5,820/tonne ($904.2/t) on May 13 before easing to Yuan 5,670/t a day later when the market took a rest from chasing for price hikes. Both prices are in terms of EXW and including the 13% VAT.
Tangshan is China’s top steel producing city in North China’s Hebei province. Last week after the billet price had reached its highest level since Mysteel started to assess the price in April 2007, the fall mainly followed Beijing’s warning that it would take action to cope with the recent surge in commodity prices.
China’s Premier Li Keqiang had stated that Beijing should “deal effectively with commodity prices that rose too fast and the rippling effect (of this)” during a meeting of the State Council – China’s cabinet – on May 12, as Mysteel Global reported.
Shortly after Li’s statement, on May 14 the Tangshan Administration of Market Regulation, the city’s Development and Reform Commission and Tangshan’s Bureau of Industry and Information Technology invited all local steelmakers for talks, warning them to not to “collude with each other, concoct and distribute information that may push up prices”, according to a release of the Administration of Market Regulation issued on the same day.
“The prices had reached a critical level where almost everyone was concerned about the height. Hence, the prices saw a dramatic retreat immediately after Beijing’s comment and the local government’s reaction,” a Tangshan-based analyst observed.
“The political impact on the prices may last for a while, even though the market fundamentals remain good,” she said.
Over May 6-12, daily billet consumption across 55 steel re-rollers in Tangshan increased further by 22,200 tonnes/day on week to 993,000 t/d, as they ramped up production to cash in on the broadening gap between billet and finished steel, according to Mysteel’s survey.
While the billet price increased Yuan 390/t on week as of last Friday, the price of Q235B 300*300mm H-beams in Tangshan, a key product among the city’s steelmakers, jumped Yuan 680/t on week to Yuan 6,310/t as of the same day, according to Mysteel’s assessment.
Against the robust consumption of the semis, though, is the persisting shortage of billet supply. Over May 7-13, daily billet supply stayed low at 24,500 t/d, or down another 1,000 t/d on week, Mysteel’s survey across 30 steel mills in the city and nearby region showed.
Inevitably, billet stocks at both traders and steel re-rollers in Tangshan have dropped drastically, the surveys showed. As of May 13, billet inventories at 14 trading houses in Tangshan declined another 86,000 tonnes or 13.9% on week to 532,600 tonnes.
Billet stocks at the 55 steel re-rollers also reversed down by 60,100 tonnes or 14.3% on week to 361,500 tonnes as of May 12.
Source:Mysteel Global
