Tangshan billet prices ticked higher on Monday as market inventories declined, albeit slower, 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 week-on-week, while the most traded January 2025 rebar contract on the Shanghai Futures Exchange 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 of 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 increasing supply of billet w-o-w, while hot metal production remained at a 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.

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

One trader says he prefers to hold on to spot billet and wait to hedge when steel futures are lower, rather than holding a long-term position.