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Surge in Billet Exports Undermines Global Trade Barriers
Chinese steelmakers circumvent tariffs by shifting exports toward semi-finished products like billets. This strategy allows access to markets such as Indonesia, Turkey, and Saudi Arabia, where rolled steel faces duties but billets do not. Reuters and Kallanish data confirm this trend began in late 2024 and intensified in early 2025.
In the first five months of 2025, China’s billet exports soared to 1.37 million tonnes, more than tripling y/y. Billets offer lower tariffs and easier market entry. As a result, Chinese mills have redirected low-margin output to foreign buyers, especially in Southeast Asia and the Middle East. These regions then reprocess and ship finished steel to Western markets, avoiding direct trade barriers.
Beijing Faces Pressure Over Low-Value Steel Outflows
However, this surge in semi-finished steel exports raises alarms within China. The China Iron and Steel Association (CISA) urged authorities to curb billet exports to support value-added production. The government may impose duties on billets to discourage such practices. Policymakers fear excessive low-margin exports could weaken long-term competitiveness.
In parallel, the number of anti-dumping cases against China continues to rise. Since January 2024, trading partners have initiated 38 trade investigations. Nations like Vietnam and South Korea imposed tariffs on Chinese metal products to protect domestic industries. These actions reflect growing global resistance to cheap steel flows.
Global Protectionism Grows Amid Rising Chinese Steel Supply
Meanwhile, Chinese exports of total steel products grew 9.2% y/y in H1 2025, reaching 58.15 million tonnes. This expansion fuels a wave of protectionist responses worldwide. Buyers are shifting focus to billets, which offer tariff arbitrage opportunities. According to Mysteel analysts, Southeast Asia has become a crucial transshipment hub for Chinese billets.
In contrast, CISA promotes export strategies that boost high-grade alloy and finished product shipments. Industry experts warn that current trends threaten to deepen trade tensions and reduce China’s control over downstream value chains.
ScrapInsight Commentary
China’s billet export strategy highlights how trade loopholes reshape global supply chains. While short-term gains appeal to steelmakers, overreliance on low-value exports could trigger long-term regulatory pushback. Tariff circumvention via semi-finished goods also undermines circular economy goals in consuming nations.
