Billet prices in Tangshan, North China's Hebei province, continued their upward trend during the week of May 20-26, driven by the strengthening of rebar futures prices following Beijing's newly announced macroeconomic measures. According to Mysteel's weekly survey, the price of Q235 150mm square billet in Tangshan rose by Yuan 60/tonne ($8.3/t) on week to Yuan 3,560/t EXW and including the 13% VAT as of May 26.

Despite the increase in local steelmakers' production costs, the rise in semis prices allowed the mills' profits on billet sales to widen. The ten major mills in Tangshan saw their average margin improve by Yuan 46/t on week to Yuan 79/t as of May 24. The per-tonne cost incurred by these mills when producing semis averaged Yuan 3,481/t including the 13% VAT last week, up Yuan 14/t on week, according to Mysteel's data.

Daily billet production among the 25 mills in Tangshan under Mysteel's tracking grew by 4,000 tonnes/day on week to reach a four-month high of 47,500 t/d on average over May 17-23. Billet producers increased their supplies after billet prices rose last week. On the other hand, daily billet consumption among the 48 local re-rollers Mysteel follows nudged down by 700 tonnes on week to average 51,000 t/d over May 16-22, indicating a small drop in billet demand with the capacity utilization rate of these re-rollers falling moderately.

As of May 22, billet stocks held by the re-rollers reversed down by 24,800 tonnes on week to 422,000 tonnes. Some re-rollers halted production for maintenance due to their deepening losses on finished steel sales, causing their procurement of semis to decline and their yard stocks of billets to fall. Total billet stocks across the four commercial warehouses and two ports in Tangshan that Mysteel monitors mounted by 6,600 tonnes on week to 775,900 tonnes as of May 23.