Posted on 29 Jul 2021
The price of Q235 150mm square billet in Tangshan, a barometer of China’s steel market sentiment in North China, inched up by Yuan 40/tonne ($6/t) on week to Yuan 5,200/tonne EXW and including the 13% VAT as of July 23 to reach a two-month high, according to Mysteel's assessment.
Supported by market expectations of looming steel production curbs, billet prices have hovered high, even though demand from re-rollers was still sluggish, a Shanghai-based analyst said.
Mysteel’s latest survey across 55 steel re-rollers in Tangshan over July 15-21 showed that their daily consumption averaged 76,700 tonnes/day, or up by a large 32,400 t/d on week. During the survey period when steelmakers in Tangshan were still under production curbs, the rather healthy profit margins that local re-rollers were earning encouraged them to buy more billets, the source explained.
Mysteel’s survey across 30 integrated steel mills in Tangshan showed that their daily billet supply averaged 27,900 t/d over July 16-22, up 4,500 t/d on week.
As of July 21, billet stocks at the 55 steel re-rollers Mysteel checks decreased 49,700 tonnes on week to 399,300 tonnes. The operation rate of the re-rollers grew during the survey period, so demand for billet increased. However, with few orders from end-users, most re-rollers procured only to fulfill immediate demand last week, the source added.
Billet inventories at the 14 trading houses in Tangshan Mysteel monitors increased for the fourth week as of July 22, higher by 87,600 tonnes on week at 592,500 tonnes, according to Mysteel’s survey. Last week, more cargoes from other regions were transported to Tangshan, which led to the accumulation of stocks, the source said.
Whether steelmakers will be subject to wide-ranging production restrictions soon will determine the level of trading activity in the spot sales market in the near term, another Shanghai-based source suggested. If cuts are introduced, both trading volume and prices will likely grow, she said.
Source:Mysteel Global
