Jiang Wei, Vice Chairman and Secretary General of CISA, pointed out that excessive billet exports are harming the long-term development of China's steel industry, and said that they have proposed to government agencies to limit these exports.
Jiang Wei stated that the rapid increase in billet exports has wasted China's rich deep-processing capacity, led to excessive consumption of domestic non-renewable energy and natural resources, increased environmental pressures and intensified low-level market competition. At the same time, the steel industry's transformation process to improve quality has been hampered by this export surge, he emphasized. "Billet exports are a type of export with low added value and high energy consumption. This also contradicts China's ‘double carbon’ goals," he noted.
Reasons for the Export Boom
According to CISA's analysis, one of the main reasons for this increase in billet exports is that finished steel products are more frequently subject to anti-dumping investigations and face trade barriers. Billet therefore stands out as a “carrier of policy arbitrage”. With an average export price 20-30% below that of finished steel products, billets offer a cost advantage thanks to the zero customs duty advantage under the ASEAN Free Trade Area.
Increasing infrastructure investments in Southeast Asian markets such as Indonesia and the Philippines are supporting billet exports from China. At the same time, products produced after deep processing in these regions are re-exported to European and US markets. The Southeast Asian market accounts for around 60% of China's total billet exports.
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