China: Billets import register downturn for 3 months in a row in Feb’22

China, the world’s largest steel producer, witnessed a decline in imports of steel billets for the third consecutive month in Feb’22. Import volumes stood at 0.45 million tonnes (mnt) last month, a significant 44% m-o-m decline compared with 0.80 mnt in Jan, SteelMint data shows.

Russia, leading exporter

Russia continued to be the largest exporter of steel billets to China at 0.17 mnt in Feb. Import volumes from Russia witnessed an increase of 31% m-o-m as against 0.13 mnt in Jan.

Oman occupied the second position among the top importers’ list in Feb’22 with 0.09 mnt followed by Iran with 0.07 mnt. However, imports of steel billets from Oman and Iran fell by 18% and 12%, respectively.

Why have imports fallen?

Steel production curbs, limited demand for semi-finished steel products, and preference for domestic billets amidst cost competitiveness decreased the country’s import bookings, SteelMint understands.

Billets import down in Jan-Feb’22

Imports of the material into China stood at 1.25 mnt in Jan-Feb’22, a decrease of 8% y-o-y as against 1.36 mnt in Jan-Feb’21.

Considering y-o-y, Russia was the largest exporter of steel billets with 0.3 mnt followed by Oman with 0.2 mnt and Iran with 0.15 mnt.

Price trends

SteelMint’s assessment of China’s imported billets (150*150mm, 3SP) prices rose to $645/t CFR in end-Jan’22 from $600/t CFR levels in end-Dec’21. Prices further rose to $675/t CFR by the end-Feb amidst demand-supply mismatch post-Russia-Ukraine trade tensions.

Chinese billet imports outlook bearish

China’s imports of semi-finished steel is expected to be on the lower side as overseas sellers and domestic buyers are finding it increasingly harder to reach deals, now that the domestic and overseas price gaps have widened further. The price gap has broadened mainly due to recent jumps in overseas billet prices driven by supply reductions from Russia, a major exporter of steel billets.

On the contrary, Chinese mills have turned active in billet exports since mid-march on better price realization. Chinese mills have sealed decent amount of deals to SE Asian and East Asian countries in the past couple of weeks.