The Q235 150mm square billet price in Tangshan, the country’s top steel producing city in North China’s Hebei province, declined by Yuan 50/tonne ($7.8/t) on week to Yuan 5,250/t EXW and including the 13% VAT as of October 15, according to Mysteel’s assessment. Market insiders attributed the price declines to poor billet trading.
For four days last week over October 12-15, steel re-rollers in Tangshan were under a production ban as part of local government air-pollution control measures, and this resulted in low buying interest for semis, according to Tangshan market sources.
Soon after on October 17, the local government ordered local steel re-rollers to again stop production, with those works whose environmental protection facilities failed to meet government standards required to halt operations immediately, and those facilities have already passed environmental protection checks required to stop from October 21. Both bans will last until the end of this month, according to the order.
A majority of steel re-rollers in Tangshan passed the government checks, but during this interval period, their productivity remained low because profits on their rolled products were unattractive, according to a Tangshan source.
“They are running just at break even and are facing pressure from slow finished-steel trading activity too,” she said.
Billet consumption among the 55 steel re-rollers under Mysteel’s survey averaged 57,000 tonnes/day over October 7-13, reversing down 7,900 t/d on week.
On the other hand, billet supply from 30 local integrated steelmakers was 30,500 t/d over October 8-14, down 1,000 t/d on week, according to Mysteel’s survey.
Local integrated mills have got sufficient finished steel orders to maintain their own production, and are therefore limiting billet supplies to the market, a second Tangshan market watcher noted. “So they intend to shore up billet prices and prevent them from falling further, by pointing to the continuing high raw-materials costs,” he observed.
Billet stocks shrank from high level last week, with the stocks at commercial warehouses reversing down by 126,100 tonnes on week to 723,000 tonnes as of October 15, whereas those at the 55 steel re-rollers declined for the second week by another 23,600 tonnes on week to 335,000 tonnes as of October 14, according to Mysteel’s surveys.
Written by Olivia Zhang, zhangwd@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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