Billet prices in Tangshan city in North China's Hebei Province decline during September 22-28, with Mysteel assessing Q235 150mm square billet price in the city lower by Yuan 90/tonne ($13/t) on week at Yuan 2,970/t EXW including the 13% VAT on September 28.

Billet production rose again during the survey week, even though the profits that steelmakers could earn from billet sales contracted once again. During September 22-28, the mills in Tangshan city under Mysteel's tracking could only earn a small Yuan 4/t from selling their semis, compared with Yuan 54/t during the previous week.

Despite the severe reduction in margins, billet output among the monitored mills rose further on week, as some producers ended maintenance on their blast furnaces and brought them back online. Daily billet production among the 22 local steelmakers Mysteel regularly monitors averaged 39,000 tonnes/day over September 19-25, up by 2,000 t/d on week.

As for demand, daily billet consumption among the 34 local re-rollers Mysteel follows averaged 46,200 t/d on week over September 18-24, down by a large 16.1% or 8,900 t/d on week.

The significant demand drop was mainly attributed to the mandated suspension of operations among local re-rollers between September 19 and 30 aimed at reducing atmospheric pollution, Mysteel noted in the weekly report. The poor profits that the re-rollers were earning from their finished-steel sales was another factor.

The poor profit performance also led local re-rollers to consume existing inventories of billets instead of procuring more, the weekly report noted.

Consequently, billet inventories held by the 34 local re-rollers Mysteel follows dropped by 38,000 tonnes on week to sit at 573,000 tonnes over September 18-24.

On the other hand, total billet stocks at the four commercial warehouses and two ports in Tangshan that Mysteel checks had edged up by a small 4,600 tonnes on week to 1.26 million tonnes by September 25.

Source:Mysteel Global