Tangshan billet prices ticked higher on Monday as market inventories declined and steel futures prices moved higher, Kallanish notes.

Spot Tangshan billet was assessed at CNY 3,180/tonne ($437/t) on Monday afternoon, up CNY 30/t w-o-w while most traded January 2025 rebar contract on Shanghai Futures Exchange meanwhile rose by CNY 36/t.

Market inventories of Tangshan billet declined 32,600t w-o-w to 791,700t on Monday, a reduction in pace versus the previous week's drop was over 70,000t. Increased local supply and worsening re-rolling margins accounted for the slower pace of decrease.

Softening long steel products sales saw two Tangshan local mills to increase supplies of billets w-o-w while hot metal production remained at high level.

Meanwhile, the fourth-round of coke price reduction has been postponed.

Orderbooks for flat products at mills did not improve compared to the earlier week, according to market sources.

Some re-rollers continued production suspensions at the start of the week due to high finished products inventories.

Although their sales improved on Monday, current prices did not allow them to full restock their raw materials.

Forwards billets, January to March delivered, were offered at CNY 10-15/t higher than spot, which was unattractive for traders while market participants remained cautious amid recently volatility.  

One trader told Kallanish that he preferred to hold onto spot billets and wait to hedge when steel futures were lower than hold a long-term position.