In late April, the domestic steel billet market continued to strengthen, driven by four key factors: a widening overseas supply gap, lucrative export margins, steel mills proactively restructuring their operations, and a contraction in domestic finished steel supply. This has become the central theme of the current rally in the ferrous metals sector.

I. Price Trends for Key Products

- Steel Billets (Square Billets)

Market price on 24 April: 3,100 RMB/ton

Compared to 1 April: +7.27%

Compared to 1 January: +11.11%

Exports: FOB USD 465–475/ton, equivalent to 3,300–3,400 RMB/ton, with export margins of 250–320 RMB/ton.

Upstream coking coal price increases have taken effect, with cost support continuing to strengthen; downstream rebar and hot-rolled coil prices have risen in tandem amid tightening supply.

II. Core Drivers Behind the Current Steel Billet Surge

1. Global supply mismatch, with China becoming the main force filling the gap

Geopolitical conflicts have disrupted supply from traditional major billet exporters, creating a critical shortage in Southeast Asia and the Middle East. Steel mills in countries such as Indonesia, which have long relied on these import sources, have faced supply disruptions and mass contract cancellations, forcing them to switch to sourcing from China. Steel supply has rapidly and effectively filled the international void, leading to a sharp surge in export orders; some enterprises already have orders booked through July and August.

2. Wide Domestic-Export Price Differential, with Export Profits Significantly Higher than Domestic Sales

The current price gap between domestic and export billets continues to widen, highlighting the significant profitability advantage of exports. Domestic ex-works prices stand at approximately 3,100 yuan per tonne, whilst export quotations, when converted to RMB, are 200–300 yuan per tonne higher.

3. High Pig Iron Output Persists, Driving Proactive Restructuring of Supply

Nationwide blast furnace operation rates and pig iron output have remained at high levels, with daily pig iron production stabilising at around 2.4 million tonnes. However, this increase has not translated into domestic finished steel supply; instead, it has been channelled into large-scale billet exports, effectively ‘diverting’ pig iron. The coexistence of high pig iron output and reduced finished steel production has curtailed domestic supply at the source, alleviating market pressure and creating a positive dynamic of proactive supply-side optimisation, thereby providing strong support for steel prices.

4. Domestic inventories continue to be drawn down, with peak-season demand creating a synergistic effect

The diversion of molten iron via billet exports, combined with steel mills’ proactive production controls, has led to a continued tightening of domestic finished steel supply. Coupled with the release of demand during the spring peak season, this has driven inventories to fall for five consecutive weeks, with total inventories declining by over 12%. Demand for construction materials has steadily rebounded, driven by infrastructure projects and the ‘guaranteed handover’ initiative, whilst essential demand for flat steel remains stable. The supply-demand dynamics continue to improve, creating a synergy with the positive export trends and further consolidating the strong foundation for billet prices.

III. Customs Import and Export Data and Market Impact

According to official statistics from the General Administration of Customs, China exported 1.5281 million tons of steel billets in March 2026, a significant month-on-month increase of 65.99% and a year-on-year rise of 48.37%, marking a new monthly high for the year; cumulative exports from January to March totaled 3.3018 million tons, up 28.99% year-on-year, demonstrating a marked growth momentum in exports. Regarding imports, 85,800 tons of steel billets were imported in March, a 46.07% month-on-month decrease; cumulative imports from January to March totaled 278,700 tons, representing a mere 2.42% year-on-year increase. The scale of imports was far lower than that of exports, resulting in a clear net export pattern overall.

In terms of export composition, plain square billets accounted for 62.30% and plain slab billets for 21.54%, with long-product billets forming the mainstay of exports; export destinations were highly concentrated in Southeast Asia, the Middle East and Africa, with Indonesia, Vietnam, Thailand, Turkey and the United Arab Emirates as the core destinations. At the policy level, the 9% export tax rebate for steel billets remains in place and was not included in the previous round of tax rebate adjustments. Coupled with freight costs from China to Southeast Asia of just USD 28–30 per ton, these dual advantages in logistics and policy have consolidated the international competitiveness of Chinese steel billets, ensuring the sustainability of the strong export momentum.

IV. Market Dynamics and Industry Chain Transmission

The current billet market is in a strong cycle characterized by high overseas demand, high export margins, low domestic supply and rapid inventory drawdown. Profits along the industrial chain are concentrating at the billet stage, effectively offsetting losses in finished steel products and supporting high operating rates at blast furnaces. The contraction in domestic supply of finished steel products is providing price support, forming a positive transmission chain: ‘strong billets → strong finished steel → strong overall ferrous metals’. Regionally, North and East China, as the main production areas, are leading the market rally, whilst southern sales regions are following suit as inventories are drawn down, with national price differentials tending towards reasonable levels.

V. Outlook

In the short term, the strong market trend for steel billets is set to continue, with prices more likely to rise than fall. The three key supporting factors—robust exports, supply contraction and inventory drawdown—remain unchanged, driving a steady upward shift in the price benchmark. Overall, steel billets have evolved from a standard intermediate product into a global regulator of supply and demand. The export-led logic of supply restructuring will continue to deepen, and the market is expected to remain at elevated levels with a strong upward bias.

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