As of March 31st, there was a significant drop in the price of Q235 150 mm square billets in Tangshan. Prices decreased by 13% compared to the previous week, reaching 3,250 Yuan/ton (449 US dollars). This decrease, equivalent to 22.1 US dollars per ton, is causing concerns within the steel sector.
The main factor behind the decline is seen as weakening demand for final steel products. This decline has led to restrictions in the operations of rolling mills and reduced demand for semi-finished products. According to surveys, daily billet consumption of 48 local re-rolling mills decreased by 1,600 tons/day to 56,600 tons/day last week.
There is also a decrease observed in raw material stocks. Billet stocks at rolling mills decreased by 50,400 tons to 369,800 tons. Total billet stocks at four commercial depots and two ports also experienced their fifth consecutive weekly decline, falling to 1.1 million tons.
The decline in semi-finished product prices, despite the decrease in production costs, is increasing losses for producers. The average loss in billet sales at integrated facilities in Tangshan increased by 10 Yuan/ton to 81 Yuan/ton.
However, some producers are planning to increase billet procurement. This has increased daily billet production to 38,500 tons/day, a weekly increase of 1,500 tons/day from March 22nd to 28th.
The news from Tangshan indicates the beginning of a challenging period in the steel sector. Falling prices, weak demand, and increasing losses paint a concerning picture for the future of the industry.
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