China: Tangshan Billet Stocks Reverse Down, Price Strengthens

Billet stocks in Tangshan, China's top steel producing city and the largest billet supply base in North China's Hebei province, started to reverse down last week amid the fast resumption of work among re-rollers, causing prices to strengthen, according to Mysteel's latest survey released on March 6. The price pickup of the semis was in stark contrast to the poor performance of the country's finished steel market last week, Mysteel Global notes.

As of March 5, billet stocks in Tangshan's 12 warehouses and at Caofeidian and Jingtang ports reversed down for the first time since the start of January, thinning by 18,200 MT or 1.7% on week to 1.06 MnT, the survey showed.

Meanwhile, the Tangshan Q235 150mm square billet benchmark price increased by Yuan 20/MT ($2.9/MT) on day Friday or by Yuan 50/MT since the beginning of this month to reach Yuan 3,090/MT EXW and including the 13% VAT, Mysteel Global noted. Nonetheless, the price remained a low level not seen since the summer of 2017.

"Demand is picking up fast. Inventory pressure has been greatly eased with the fast resumption of billet users and the recovery in transportation," a Tangshan-based market watcher commented.

Over February 26-March 5, billet consumption among the 95 Tangshan steel re-rollers under Mysteel's survey averaged 62,000 MT/day, up by a sizzling 38,500 MT/d or 163.8% on week.

"Downstream demand for steel products is recovering, though the utilization rate (among steel end users) is only around 30%. We just need to be patient (to wait for the full recovery of demand)," an official with a Tangshan steel mill told Mysteel Global on Thursday.

The fast recovery in the semis market contrasts sharply with the situation in China's steel market where demand is recovering only slowly, inventories continue to mount, and prices are under pressure.

As of March 5, steel stocks among traders in 35 Chinese cities hit 25.3 MnT, increasing by another 6.5% on week and refreshing the record high since January 2013. On the same day, Mysteel's national HRB400 20mm dia rebar benchmark price stood at Yuan 3,605/MT, down by a total of Yuan 6/MT from March 2, according to Mysteel's data tracker.

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