Posted on 01 Sep 2021
The price of Q235 150mm square billet in Tangshan assessed by Mysteel reversed up Yuan 70/tonne ($10.8/t) on week to Yuan 4,950/t EXW and including the 13% VAT as of August 27, as billet consumption revived quickly after the major consumers, local steel re-rollers, resumed operations, Mysteel’s latest weekly report indicated.
Tangshan is China’s top steel producing city in North China’s Hebei province, and the billet price is always seen as the bellwether of China’s steel market development, Mysteel Global noted.
A total of 41 Tangshan steel re-rollers had passed local government inspections of their environmental protection upgrades and so were allowed to resume work one after another since August 21 following the production ban in place since August 3, according to notices posted by the city’s Ecology and Environment Bureau.
Local steel re-rollers doubled their production last week, the findings of Mysteel’s weekly survey across 55 Tangshan steel re-rollers suggests. The rollers’ daily billet consumption averaged 551,000 tonnes/day over August 19-25, higher by a huge 325,000 t/d on week.
“Although the re-rollers’ profits are not high, they are still active in production, and this is what’s causing demand for billet to steadily increase and billet inventories to steadily fall,” a Tangshan-based market analyst stated.
The survey across the 55 steel re-rollers showed that billet inventories at their yards reversed down for the first time after three weeks of gains last week, declining 12,800 tonnes or 2.1% on week to 610,700 tonnes as of August 25.
On the other hand, billet stocks at 14 retail dealers in Tangshan continued to mount for the ninth week, though the pace had slowed markedly. The stocks swelled by 17,900 tonnes or 2.2% on week to 837,300 tonnes as of August 26, according to Mysteel’s survey.
“In the near term, billet supplies in Tangshan will remain tight,” the analyst said. “The supply pressure may be intensified by the fact that nearby Shandong province (in East China) is taking some of the semis made in Tangshan or originally destined for Tangshan, as Shandong’s steel output has been seriously suppressed,” she said.
Among many provinces/cities in China, Shandong was one of the first to curtail production among its local mills starting last month in response to Beijing’s call to lower steel output for carbon reduction, as Mysteel Global reported.
Source:Mysteel Global
