Chinese steel producers are increasingly exporting semi-finished products like billets to avoid tariffs imposed on finished steel in markets such as Indonesia and Turkey, according to a Reuters report citing industry sources. The strategy is helping circumvent trade barriers but has triggered concern in Beijing over the rising volume of low-value exports.
Steel billet exports from China surged to 4.72 mln tons between January and May, three times higher than the same period last year, accounting for nearly 10pct of total steel exports, customs data shows. Key destinations included Indonesia, the Philippines, Saudi Arabia, Italy, and Turkey, markets where finished steel faces tariffs but billets do not.
Some of this demand stems from trans-shipment, where Chinese billets are processed in Southeast Asian countries and then re-exported to Europe or the U.S. However, this trade route has been partially disrupted by the U.S.’s 50pct steel tariffs introduced under former President Donald Trump.
China’s state-backed China Iron and Steel Association (CISA) has urged a pivot toward higher-value exports. Last month, CISA called on the government to curb billet exports to ensure the sector focuses on value-added steel products instead.
