Tangshan billet margin exceeds Yuan 1,000/t
Posted on 07 April 2021
Gross billet profits among ten steel mills in Tangshan, the top steel producing city and billet supply base in North China’s Hebei province under Mysteel’s survey averaged Yuan 1,024/tonne ($156.3/t) as of April 2, or above the threshold of Yuan 1,000/t again since August 2018.
The local billet margin has been enlarging since March among the steady strengthening in billet price while lower raw material costs with coke price in particular, as the domestic steel demand has been improving while supply has been reducing with the ongoing 30%-50% restriction among 23 Tangshan mills’ operative steelmaking capacities since March 20.
As of April 3, Tangshan Q235 150mm square billet price reached Yuan 5,010/t EXW and including the 13% VAT, exceeding the threshold of Yuan 5,000/t just one day after the national rebar price and refreshing the 12.5-year high again, as Mysteel Global reported.
Over March 26-April 1, billet supply from the 29 steel mills in Tangshan and nearby regions hovered relatively low at 22,000 tonnes/day against the daily billet consumption at 97,500 t/d among 53 re-rollers in Tangshan over March 25-31, Mysteel’s weekly surveys showed.
The mismatch in billet demand and supply was rather obvious though the daily billet consumption reversed down 5,400 t/d on week while the supply recovered 1,000 t/d, the survey showed.
Lower consumption, though, was mainly due to the fact that “some rolling lines have been halted on billet shortage, and the gap has failed to be filled up even with supplies from the other Chinese regions or overseas,” a Tangshan-based steel analyst said, estimating over 400,000 tonnes of billets will be delivered to Tangshan for April from elsewhere.
Billet inventories at 14 trading warehouses in Tangshan, including two ports, thus, had declined for the fifth week, at a faster on-week pace of 236,500 tonnes or 50.8% on week to 229,200 tonnes as of April 1, or a new low in over four months, and the tonnage at the 53 Tangshan re-rollers eased for the fourth week by 57,000 tonnes or 13.2% on week to 431,500 tonnes as of March 31, Mysteel’s data showed.Source : Mysteel Global