The price of Q235 150mm square billet in North China's Tangshan under Mysteel's assessment sat at Yuan 2,920/tonne ($408/t) EXW and including the 13% VAT as of June 29, the same level as a week earlier. While billet production continued to climb, demand showed a moderate retreat, according to Mysteel's weekly survey.
Daily billet output among the 22 steelmakers in Tangshan that Mysteel tracks averaged 47,400 tonnes/day over June 20-26, rising for the second week by 1,500 t/d. Some mills chose to scale back finished steel production and instead, increased billet output to take advantage of relatively healthy margins on the semis, according to the survey.
The average cost when producing billet incurred by the ten steel mills in Tangshan that Mysteel checks eased by Yuan 13/t on week to Yuan 2,797/t including the 13% VAT last week, while the average profit they earned when selling those semis had reached some Yuan 113/t as of June 27, or up Yuan 3/t on week, according to Mysteel's data.
On the demand side, several local re-rollers reduced their billet procurement in response to losses on finished steel sales. As such, daily billet consumption among the 43 re-rollers that Mysteel monitors in Tangshan slipped by 4,800 t/d on week to average 40,300 t/d over June 19-25.
The lower consumption saw billet stocks held by the surveyed re-rollers mount slightly during the sample week to reach 470,600 tonnes by June 25, higher by 19,400 tonnes on week, Mysteel's data showed.
Meanwhile, total billet inventories at local retailers grew for the second week last week, with the tonnage in the four commercial warehouses and two ports in Tangshan that Mysteel follows swelling by 79,000 tonnes from a week earlier to 827,600 tonnes as of June 26. This rise was mainly attributed to accumulating inventories caused by the drop in re-rollers' billet purchases, survey respondents explained.
Source:Mysteel Global
