WEEKLY: Tangshan billet price touches decade’s high
The price, in terms of EXW and including the 13% VAT, had indicated the market concern on supply disruption in Tangshan through its volatility, as steel operations in China especially those in North China such as Tangshan in Hebei are usually affected before and during the “Two Sessions” - the most important annual political meetings in Beijing usually in March – out of safety and air quality concerns.
For 2021, on March 3, one day before the convening of the “Two Sessions”, Tangshan, as expected, intensified it curbing on local steelmakers, ordering more sintering plants to suspend operations and trucking for raw materials and finished steel have been halted too.
“We have been requested to stop two sintering plants, one big, one small, which has posed a serious threat to the normal operations of our blast furnaces,” an official from a steel mill in Tangshan shared last week, grudging, “the environment protection measures are just too strict”.
“Such news, unsurprisingly, has boosted China’s domestic steel prices, both spot and futures,” he noted.
Crude steel output across 126 blast furnaces in Tangshan inched down, as the average capacity utilization rate went down 0.7% on week to 75.4% as of March 4, or way lower than then above 92% among 247 blast-furnace steel mills nationwide, according to Mysteel’s surveys.
Higher billet price, however, dampened the buying enthusiasm among the local steel re-rollers in Tangshan, as they have stocked up sufficient volumes in the prior two weeks and their rolling mills had been temporarily shut down too by the local authorities on air pollution control, according to Mysteel’s latest weekly report.
As of March 3, billet stocks at 53 steel re-rollers in Tangshan totalled 686,900 tonnes, up another 3,600 tonnes on week or having refreshed the record high since Mysteel launched the survey in June 2020.
By March 4, billet inventories at 14 trading houses in Tangshan stayed largely stable, which reversed down marginally by 8,300 tonnes to 776,400 tonnes, according to Mysteel’s survey.
Written by Olivia Zhang, zhangwd@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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