WEEKLY: Tangshan billet price hovers amid robust demand
“Billet demand has outpaced supply now, but the thin profits among the re-rollers makes it hard for billet suppliers to reflect the robust sales in prices,” an industrial source in Tangshan explained, noting though, the billet price had been hovering high after having hit a five-month high of Yuan 3,580/t EXW and including the 13% VAT on April 15.
At present, the Tangshan section re-rollers’ margin averages only Yuan 20/t, though those producing steel angles may be with slightly higher profits, according to the industrial source. Tangshan is home to nearly 200 steel re-rollers with the majority being section rolling mills, Mysteel Global understands.
In contrast, billet margins still stayed high at Yuan 597/t including the VAT as of April 19 despite a Yuan 19/tonne week-on-week decline, according to Mysteel’s survey across ten sample steel mills in Tangshan.
The continuing robust demand for billet among Tangshan re-rollers has been clearly manifested in Mysteel’s latest weekly survey, which showed that billet inventories at 11 trading houses and two ports - Caofeidian and Jingtang – under the Tangshan jurisdiction declined for the third week over April 12-18, down another 143,300 tonnes or 22.5% to 492,500 tonnes as of April 18.
Billet inventories at 33 Tangshan steel rolling mills decreased mildly by 15,000 tonnes or 3.9% on week to 371,000 tonnes amid their gradual ramp-up in production after the end of the suspension at the end of March as part of the winter restriction by the local authorities.
The continuing decline in billet stocks may be soon reflected in Tangshan billet price if China’s domestic steel prices continuing strengthening, according to market sources.
As of now, Tangshan re-rollers have not implemented any production restrictions yet though they were ordered to do so since the start of April, with only some of them idling the facilities over April 20-21 when the local government officials conducted on-site checks, Mysteel Global understands from the market.
Written by Olivia Zhang, zhangwd@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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