China: Steel billet imports fall over 40%, y-o-y, in H1CY'22

China, the world's largest steel producer, witnessed a significant decline in imports of steel billet in H1CY'22 (January-June 2022). Import volumes stood at 2.77 million tonnes (mnt) in H1CY22, a 44% y-o-y fall compared to 4.93 mnt in the same period last year, customs data maintained with SteelMint shows.

Russia leading exporter

Russia emerged as the largest exporter of steel billet to China at 0.76 mnt in the period under review. Import volumes from Russia witnessed a sharp rise of 171% y-o-y as against 0.28 mnt in H1CY21.

Oman occupied the second position among the top importers in H1CY22 with 0.60 mnt followed by Iran with 0.35 mnt. Imports of steel billet from Oman rose by 15% while those from Iran fell by 52%, respectively

Why have imports fallen?

Steel production curbs, preference for domestic billet amidst cost competitiveness, and the Covid upsurge in the latter part of H1, followed by lockdown restrictions as well as the summer off-season (high temperatures in the north and heavy rains in the southern region) leading to limited demand for semi-finished steel decreased the country's import bookings, SteelMint understands.

Imports of the material into China stood at 0.26 mnt in June 2022, an increase of 20% m-o-m as against 0.22 mnt in May. On a m-o-m basis, Russia was the largest exporter of steel billet at 0.14 mnt, followed by the United Arab Emirates (UAE) with 0.08 mnt.

Outlook

China is still signalling subdued demand, as denoted by its domestic rebar prices, which fell below RMB 4,000/t ($591/t) recently to RMB 3,950/t ($584/t), after a long time.

However, many feel the subdued demand is on account of seasonal uncertainty and that consumption will bounce back in the second half, buoyed by a slew of government policies aimed at kickstarting an infrastructure boom.