Rumors about possible restrictions on billet exports from China have emerged today, June 30, after a warning made by the China Iron and Steel Association (CISA). However, as there are no concrete moves so far and a part of market sources are skeptical that measure can be tough, there has been limited effect to the market.
In the January-May period this year, China’s semi-finished steel exports amounted to 4.7165 million mt, up 305.8 percent year on year, according to the customs statistics. The CISA said that the volumes this year have already exceeded those for the whole years of 2023 and 2024. “The surge in exports of steel billets has wasted the country's downstream capacities… left more carbon emissions, hindered the upgrading of the steel industry, and intensified low-level market competition. The association has proposed to the relevant state ministries and commissions to restrict the export of steel billets,” the CISA stated.
Nevertheless, the SteelOrbis reference price for ex-China billet has remained stable at $420-430/mt FOB, while the average local billet price has risen by just RMB 3/mt ($0.4/mt) to RMB 2,913/mt ($407/mt) ex-warehouse. The market has been impacted more by fundamentals such as the seasonally weak local demand. The relatively stable raw material prices have also been attributing to the stable conditions in the billet market. “This is just a call from the CISA, I don’t think it is compulsory,” a large Chinese trader commented. “It is only a rumor now. No one knows if the government will do anything,” another large market player said.
Prices of ex-Indonesia billet have been fluctuating lately, with a $5/mt decrease seen since Friday to $425/mt FOB, but this is mainly because of the almost absent demand for October shipments.