Chinese Billet Stocks at Tangshan Traders Renew 2-yr High

Billet stocks at 14 trading houses under Mysteel’s weekly survey in Tangshan, North China’s Hebei province, surged to a near two-year high of 1.08 MnT as of February 27, though the speed with which stocks are rising slowed during the survey week amid the gradual resumption of buying among re-rollers, according to Mysteel’s latest survey.

The last time that Tangshan’s traders held this many semis was on 30 Mar'18, Mysteel notes. The total includes the volumes that traders were keeping in warehouses at Caofeidian and Jingtang ports, both of which are under the jurisdiction of Tangshan.

Over the February 21-27 survey week, the traders’ inventories grew by 161,000 MT or 17.5% on the week – making for the sixth straight on-week rise – but the growth shrank by half compared with the previous week as more consumer industries resumed operations.

Meanwhile, billet inventories at the 33 Tangshan steel re-rollers Mysteel monitors regularly recorded another increase, climbing by a further 72,800 MT or 16.2% from 20 Feb'20 to the top 508,000 MT as of 27 Feb'20. Survey respondents explained that the re-rollers had bought very little billet earlier in the month from local billet traders or steel mills so the recent pick up in purchasing was strong by comparison.

As of 27 Feb'20, the Tangshan Q235 150mm square billet price was assessed at Yuan 3,060/MT (USD 438.8/MT) EXW and including the 13% VAT, recovering by Yuan 50/MT on week amid the stronger demand, Mysteel’s survey showed, reflecting the recovery in demand from re-rollers.

Mysteel’s other survey among steelmakers in Tangshan showed that 55 of their 138 blast furnaces were halted for maintenance as of 27 Feb'20, unchanged from the previous week. The capacity utilization rate of those furnaces in operation declined by another 1.85 percentage points from 20 Feb'20 to reach 69.47% as of last Thursday, which was also 7.2 percentage points lower on year.

By 28 Feb'20, more construction sites around the country had resumed operations, with public transportation has returned to normal and laborers having arrived back at their worksites after completing the required 7-day or 14-day quarantine to show they were not infected with the COVID-19 virus, Mysteel Global notes.

source: SteelMint