China: Billet imports drop 25% m-o-m in Jul'21 on production cuts

China, the world's largest steel producer, registered billet imports of 0.88 million tonnes (mn t) in Jul'21, down by 25% m-o-m as compared to 1.17 mn t in Jun'21, data maintained with SteelMint shows.

Steel production cuts and quarantine delays for the past few months amidst declining futures resulted in decrease in imports, SteelMint understands.

Iran largest exporter

Iran turned out to be the largest exporter of steel billets to China at 0.13 mn t in Jul'21, down by 28% m-o-m, but outstripping Vietnam and Indonesia who used to be the key traditional exporters to China. This sharp rise is likely because China had annulled the 13% value-added tax (VAT) rebate on 146 steel products (including rebar) effective 1 May'21. This benefitted other overseas countries, including Iran, allowing them to explore export opportunities to China. However, due to power outages and export restrictions seen in the past one month in Iran, the country's billet export allocations are expected to remain on the lower side.

Vietnam came down to the second position in the top exporters' list in Jul'21 with 0.11 mn t followed by Indonesia with 0.10 mn t, a m-o-m decrease of 45% and 56%, respectively.

China's billet imports from India amounted to 0.06 mn t in Jul'21 as against 0.03 mn t in Jun'21, a whopping increase of 100%, according to data maintained by SteelMint.

However, the same in Jan-Jul'21 were recorded at 0.33 mn t, decreasing 80% compared to 1.62 mn t in Jan-Jul'20.

China's billet imports down y-o-y in Jan-Jul'21

Imports of the material into China stood at 5.82 mn t in Jan-Jul'21, a considerable decline of 25% y-o-y as against 7.72 mn t in Jan-Jul'20. Vietnam was the largest exporter with 1.43 mn t followed by Indonesia and Iran with 0.96 mn t and 0.86 mn t, respectively.

It is important to note that Russia and India, who were the other top exporters in CY'20, saw a massive decrease of 96% and 80% respectively (as already mentioned) in their volumes this year.

Outlook

Chinese buyers have kept away from booking imported billets in the last couple of weeks due to volatility in rebar futures and absence of firm bids which may result in lower import volumes in Sept-Oct'21, SteelMint notes.