The price of Q235 150mm square billet in Tangshan in North China's Hebei province, the country's largest steel production hub, rebounded by Yuan 40/tonne ($5.5/t) on week to reach Yuan 3,500/t EXW and including the 13% VAT as of May 19, Mysteel's assessment showed.

Re-rollers in Tangshan saw their profit margins on finished steel sales improve last week, prompting many to lift their production which in turn required them to procure more feed materials than during the previous week, the results of Mysteel's weekly survey show. Futures prices of Chinese ferrous commodities including rebar strengthened during the latter part of last week, which also buoyed semis prices, a survey respondent said.

Over May 9-15, daily billet consumption among the 48 re-rollers in Tangshan under Mysteel's tracking picked up substantially by 19,600 tonnes/day on week to average 51,700 t/d. Meanwhile, as local re-rollers increased their purchase of semis, total billet stocks across the 48 re-rollers in Tangshan Mysteel checks grew by 44,600 tonnes on week to a 2.5-month high of 446,800 tonnes as of May 15.

On the supply side, daily billet output among 24 steelmakers in Tangshan Mysteel monitors fell by 2,000 t/d on week to 43,500 t/d on average over May 10-16, as some mills slightly scaled back production due to unstable billet sales. Lower output and rising replenishment demand saw total billet inventories across the four commercial warehouses and two ports in Tangshan Mysteel follows thin for the second week, falling by 85,400 tonnes on week to 769,300 tonnes by May 16, an eight-month low.

On the other hand, the average cost incurred by the ten major mills in Tangshan that Mysteel canvasses was higher by Yuan 23/t on week at Yuan 3,467/t including the 13% VAT last week, while the mills' average profit had inched up by Yuan 7/t on week to Yuan 33/t as of May 17.