Since Monday, February 26, rumors of a possible export ban or export duty on semi-finished products from China have emerged, following an increase in billet sales overseas lately due to weak local market conditions.
At the moment, this information has not been confirmed officially, but a number of sources have said that the rumors exist and that the government has started checks. “It is just at the stage of investigation by the authorities into the mills regarding why the mills want to export billets instead of the final products,” a large Chinese trader said. From 80,000 mt to 100,000 mt of Chinese billet were sold to Asian buyers over the past week, according to sources.
“These types of rumors aren’t really uncommon. They keep coming up from time to time when China is active,” a Singapore-based source said. Another trader from Singapore has also heard the rumors, but said that the exports of billet from China are better regulated by the local market than by possible government restrictions. “Today futures are up, spot prices are slowly following, and so I hope Chinese materials [billets] will go away in time [from the export market],” he said.
However, market sources believe that the possible consequences of the investigation for semis exports will be for slabs, not for billets. “My opinion is that the core issue lies in the fact the slab can be exported to Europe directly, because there is no AD issue. At the same time, the final products can only be sold to Asia and the Middle East where the prices are relatively low… If there is some policy to limit the exports of semis, it is going to have an impact on slabs, not on billets,” a source said. Last year, China exported nearly 600,000 mt of slabs to Europe, up by more than 50 percent compared to 2022, according to the estimations of SteelOrbis Research. China’s share in the import slab market in Europe increased to over 11 percent.