Tangshan steel supply to fall as re-rollers face emergency curbs
The emergency curbs in Fengrun district, where most of Tangshan's re-rollers are located, are expected to last until around November 23, according to a source in the city. The air quality in Tangshan is estimated to improve by then, as the latest air quality forecast by China's Ministry of Ecology and Environment showed.
With the curbs in place, the operational rate at the 35 section re-rollers in Tangshan under Mysteel's regular monitoring dropped substantially to 15% on November 20, compared to the previous 40.4% recorded on November 15. Also, the sampled re-rollers' combined production of section steel saw a reduction of 30,000 tonnes/day.
On the other hand, this round of production curbs at re-rollers will alleviate the prominent imbalance in supply and demand of section steel in Tangshan and offer more support to local prices of this steel item, the Tangshan source pointed out.
The inventories of section steel piled at re-rollers in Tangshan accumulated to a rather high level recently when those steelmakers' production remained relatively steady, Mysteel Global noted. More importantly, the increased prices of section steel in the city deterred many downstream users in buying, which also led to the mounting steel stocks at re-rollers.
For example, the Q235B 25mm I-beam price in Tangshan climbed to a seven-month high of Yuan 4,110/tonne ($573.3/t) EXW and including the 13% VAT on November 21, up by Yuan 340/t on month, Mysteel's assessment showed. The section steel prices sourced the upward momentum from the stronger futures of major ferrous commodities in China of late, Mysteel Global understood.
As for stocks of section steel, the volume nursed by the 35 re-rollers in Tangshan under Mysteel's survey grew to 714,400 tonnes on November 15, touching the highest since early May. And the stocks gained for two straight weeks by another notable 7.4% on week, Mysteel data showed.
Written by Lea Li, liye@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
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