Tangshan Billet Market Quiet as New Year Break Looms

The billet market in Tangshan, China’s top steel producing province and the largest billet supply hub in North China’s Hebei province, experienced a quiet week last week, with most steel re-rollers and billet traders stopping work early to celebrate Chinese New Year (CNY), Mysteel Global learnt from local market sources.

The official CNY break spans January 24-30 this year, but many market participants left the market earlier to enjoy a longer holiday, the sources indicated.

“Steel re-rollers have closed their businesses early. They are losing money producing anyway, because of the current high production cost,” a Tangshan-based industry source explained.

Since January 13 Mysteel’s benchmark price for Q235 150mm square billet in Tangshan has been locked in at Yuan 3,300/tonne ($479/t) EXW and including the 13% VAT due to the slack trading. The lock-in price will last until the end of CNY on January 30, as Mysteel Global reported.

While many downstream users have left the market, Tangshan’s upstream integrated steel mills have continued to produce billets, Mysteel Global understands.

The latest Mysteel survey across 138 blast furnaces in Tangshan showed that the blast furnace utilization rate reached 80.2% as of January 16, 1.4 percentage point higher on week or 4.4 percentage points higher on year.

As these Tangshan billet producers have no stockyard for billets, most of the semis – those which failed to find buyers among the re-roller community – were shipped to traders’ warehouses, resulting in the quick accumulation at these warehouses, according to another market source based in Tangshan.

As of January 16, billet stocks at the 14 trading houses in Tangshan, including the Caofeidian and Jingtang ports, which Mysteel regularly canvasses, increased by 30,300 tonnes or 16.3% on week to 216,200 tonnes, Mysteel’s latest survey showed.

“The billet stocks have been growing at an even faster pace over the past few days, but they are still much lower than last year around the same period,” she told Mysteel Global on Tuesday.  Last year on January 31, the week immediately prior to CNY, the stocks totalled 397,900 tonnes, according to Mysteel’s data.

As of January 16, billet inventories at 33 Tangshan steel re-rollers were at 220,500 tonnes, down 10,200 tonnes or 4% on week, the latest survey indicated.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.