China: Steel billets imports fall 31%, y-o-y, in CY21

China, the world’s largest steel producer, witnessed a fall in billets imports in CY’21. The volumes stood at 11.97 million tonnes (mn t) in the period under review, a 31% y-o-y fall as against 17.35 mn t in CY’20, as per customs data maintained by SteelMint.

China’s billets imports rose in CY’20 on strong demand as a result of the economic rebound since Mar-Apr’20, at a time when most other major economies around the world had been paralysed by the pandemic. The situation, however, changed dramatically in 2021. China’s billets imports took a hit due to steel production curbs, preference to domestic billets and weak demand.

Meanwhile, billets imports fell sharply by 47% m-o-m in Dec’21 to 0.92 mn t compared to 1.73 mn t in Nov’21.

Vietnam emerges as largest exporter to China

Vietnam, surpassing Russia, emerged as the largest exporter of steel billets to China at 2.61 mn t in CY’21. However, the volumes dropped by 13% on year as compared to 3.01 mn t in CY’20.

Notably, Vietnam’s domestic demand remained subdued amidst Covid concerns resulting in mills actively exploring the exports market. The rise in Vietnam’s steel exports in 2021 supported domestic steel producers, who found survival difficult as steel consumption slumped amidst pandemic outbreaks and lockdown. According to the Vietnam Steel Association (VSA), since the outbreak of Covid-19 at the end of Apr’21, special distancing measures have been implemented in the country which resulted in construction activities getting suspended, leading to a decrease in domestic consumption.

Rise in exports from Indonesia, Oman

Indonesia acquired the second position among the top exporters’ list with 1.72 mn t in CY’21 followed by Oman with 1.33 mn t. China’s billets imports from Indonesia and Oman rose sharply by 89% and 105%, respectively, in CY’21.

Price trends

The monthly average price of SteelMint’s China imported billets (150*150mm, 3SP) assessment fell to $618/t CFR in Nov’21 from $698/t CFR levels in Oct’21. Prices fell further to $597/t CFR in Dec’21.

Outlook

China’s imported billets market regained momentum post-the New Year holidays after remaining silent in the year end. Import bookings have picked up mainly on restocking demand ahead of the Lunar New Year holidays starting 1 Feb’22.