The price of Q235 150mm square billet in North China’s Tangshan, the bellwether of China’s steel market movement, refreshed its 15-month high last week, climbing by another Yuan 70/tonne ($10.6/t) on week to reach Yuan 3,580/t EXW and including the 13% VAT as of November 13, according to Mysteel’s assessment. But downward pressure is building as frequently imposed production bans on steel re-rollers have dulled their appetite for billets.
Since November 8, the operations of steel re-rollers in Tangshan have been subject to an emergency production ban as the city government responds to forecast poor air quality over the city. The previous ban just ended on November 5. The ongoing curtailment is expected to last until at least November 17, though previously, the curbs were to have been lifted on November 14 before the local government extended them, Mysteel Global understands.
“Air pollution becomes more easily concentrated in winter because the still, crisp air is not conducive to diffusing atmospheric emissions, so production bans are issued more frequently and enforced more strictly,” a Tangshan-based industry source observed.
“Whenever the pollution reaches a certain level, production cuts or full bans will follow. There is a special department monitoring the weather and government staff will patrol and supervise (the implementation) in their respective districts,” a mill source in Tangshan said.
Last week, daily consumption of billets averaged 61,400 tonnes/day, down by another 6,900 t/d on week, according to Mysteel’s survey across 53 steel re-rollers locally. The consumption volume would be above 80,000 t/d-100,000 t/d were all steel re-rollers producing normally.
Yet, thanks to the fact that local billet supply has stayed comparatively low – and especially that part of the volume diverted to re-rollers in the nearby Tianjin municipality – the supply-demand balance of billet remains healthy, Mysteel’s weekly report suggested.
Last week, billet supply from 30 steel mills in Tangshan and from makers in other provinces in North China and Northeast China was 51,300 t/d, stable from the prior week, according to another Mysteel survey.
Billet stocks at Tangshan’s steel traders continued to shrink last week, down by another 39,400 tonnes or 12% on week for the ninth week to nearly a six-month low of 288,100 tonnes as of November 12, Mysteel’s survey showed.
Meanwhile, billet inventories at the 53 steel re-rollers that Mysteel surveys swelled by another 11,500 tonnes or 2.1% on week to 550,900 tonnes as of November 11.
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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