WEEKLY: Healthy demand keeps Tangshan billet prices up
Source: Mysteel
Jun 04, 2018 14:48
The price of Q235 billet in Tangshan in North China’s Hebei province rose by Yuan 50/tonne ($7.8/t) on week to Yuan 3,670/t EXW including the 16% VAT as of June 1, according to Mysteel’s latest weekly survey.
The uptick in the price, a barometer of the health of China’s steel market, reflects the keenness of suppliers to lift their offer prices while market sentiment remains positive, according to industry pundits. The Tangshan government’s launch of emergency measures to improve air quality over the city by restricting steelmakers’ use of heavy trucks during May 26-June 3 has affected billet supplies to market and is lending support to North China billet prices, Mysteel noted.
Meanwhile, billet demand remained healthy last week, with Mysteel’s latest weekly survey showing that billet inventories among Tangshan’s eleven major billet warehouses and two ports dropped for a tenth successive week. Stocks were down by 72,000 tonnes or 19% on week to 301,000 tonnes as of June 1.
Meanwhile, billet demand remained healthy last week, with Mysteel’s latest weekly survey showing that billet inventories among Tangshan’s eleven major billet warehouses and two ports dropped for a tenth successive week. Stocks were down by 72,000 tonnes or 19% on week to 301,000 tonnes as of June 1.
Despite the higher prices, the margin that makers were making on billet sales declined by Yuan 36/t on week to Yuan 927/t including the 16% VAT, the latest survey showed. This was mainly because production costs increased week-on-week by Yuan 86/t to around Yuan 2,743/t on average including the 16% VAT.
Nevertheless, the pace at which Tangshan billet producers have brought upstream facilities back online after stoppages for maintenance and other reasons picked up last week, with Mysteel’s latest weekly check of capacity utilization published on June 1 showing that blast furnace utilization among operators of the 164 furnaces it surveys in Tangshan rose by another 1.5 percentage points to 81.18%.
Over the May 26-June 1 period, some 39 of the 164 blast furnaces under the survey in Tangshan were idled, still affecting 23,090 cu m in volume, or 568,000 tonnes of actual molten iron output. Nevertheless, this was less than the 608,000 tonnes of productive capacity offline over the May 19-25 period, according to Mysteel’s database.
On the other hand, local re-rollers seem to have slowed their pace of procuring semis, Mysteel notes. This is not surprising given the latest round of suspensions on steelmaking operations in the city also occurred over May 26-June 3 so there was less billet available.
As a result, billet inventories at Mysteel’s 28 surveyed re-rollers in Tangshan dropped by 41,000 tonnes or 13% on week to 282,000 tonnes as of June 1.
Written by Thea Feng, fengyx@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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