China’s billet exports welcomed as global scrap prices rise

• US steel import tariffs push up domestic scrap prices
• Mills’ output costs lower by $20/t when using Chinese billets

Mysteel Global: Overseas mini-mills have shown a growing interest in Chinese billets recently, as global steel markets experience notable shifts due to rising steel and scrap prices, largely influenced by US tariff policies, Mysteel Global has learnt.

The US government’s decision to impose 25% tariffs on steel imports from all countries took effect on 12 March, leading to a sharp increase in its domestic steel product and scrap prices.

The US is a key exporter of scrap, and surging domestic prices have pushed global tags higher, impacting production costs for electric-arc-furnace (EAF) mills that rely heavily on scrap as a steelmaking raw material, an industry expert told Mysteel Global.

Under such circumstances, many EAF steel producers around the world are eyeing billet supplies from abroad, including China, as a potential substitute for expensive US scrap.

For instance, Taiwanese mini-mills have raised the use of billets in their rebar production. With competitively priced billets from the Chinese mainland, these mills can lower production costs by approximately $20/tonne (t) compared to using scrap, an official with a leading steel mill in central Taiwan told Mysteel Global.

Meanwhile, global scrap prices delivered to Taiwan have continued to rise. As of 17 March, US-sourced HMS 1&2 80:20 touched $320/t CFR Taiwan, up by $25/t since the beginning of the year, while Japanese-origin H2 also climbed higher by $20/t to $325/t CFR Taiwan.

Local scrap prices in Taiwan tracked higher as well. Feng Hsin, the largest rebar producer on the island, raised its buying price of HMS 1&2 80:20 to TWD 9,500/t ($288/t) as of 17 March, an increase of TWD 900/t since the start of the year.

Mysteel also heard that last week, trading prices of Chinese 3SP billets were at $445/t CFR, and a Chinese trader shipped 45,000 t of billets in batches to the ports of Jakarta and Surabaya in Indonesia.

Elsewhere, a market participant in Turkiye noted that the country’s EAF mills are closely watching billet prices from China and other potential sources around the world.

As of 18 March, Chinese steel mills offered 3SP 150 mm billets at $440/t FOB for May shipment, remaining largely stable compared to $440-442/t FOB on 13 March.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.