Billet prices in Tangshan, North China's Hebei province, remained largely stable during September 21-27, with Mysteel assessing the price of Q235 150mm square billet in the city at Yuan 3,000/tonne ($447/t) EXW and including the 13% VAT on September 27, unchanged from one week earlier.
The stability in Tangshan billet prices reflected cautious sentiment among market participants amid firm cost support but weak sales of billet-rolled finished steel products, Mysteel Global noted.
Billet demand in Tangshan continued to improve last week amid lingering expectations for collective replenishment of finished steel products ahead of the National Day holiday from October 1-7.
The billet consumption among the 34 Tangshan re-rollers under Mysteel's tracking increased for the second consecutive week, rising 6.6% or 2,800 tonnes/day on week to average 45,200 t/d over September 17-23.
However, persistent losses among Tangshan re-rollers prevented them from significantly increasing billet purchases, with most continuing to procure billets only on a need-to basis, a Mysteel analyst pointed out in the weekly roundup.
As a result, billet inventories held by the 34 surveyed re-rollers remained largely stable, with stocks totaling 705,000 tonnes as of September 23, up by a marginal 500 tonnes on week.
Meanwhile, commercial stocks of billet edged down, with volumes held at three warehouses and two ports in Tangshan under Mysteel's coverage declining by 1.3% or 19,200 tonnes on week to 1.5 million tonnes as of September 24.
Lukewarm billet trading activity also prompted some local steelmakers to slow their billet sales to the market, the analyst added.
Specifically, billet sales or exports by the 21 steel mills in Tangshan and surrounding regions under Mysteel's monitoring averaged 34,500 t/d over September 18-24, down 9.9% or 3,800 t/d on week.
Tangshan billet prices are expected to soften slightly in the near term, the analyst predicted. Billet supply is likely to remain at relatively low levels, but deepening losses on finished steel sales may prompt some re-rollers to suspend production, weakening market fundamentals and weighing on billet prices. However, relatively strong cost-side support would limit the price downside in the short term.
Source:Mysteel Global
