[SMM Analysis] Steel Billet Drives Growth, ASEAN and Africa Absorb Supply, Middle East Weakens

According to data from the General Administration of Customs, China's cumulative exports of steel products and steel billets from January to August 2026 totaled approximately 89.21 million mt, up about 2.85% from 86.74 million mt in the same period of 2025. The 17 categories combined reached approximately 89.22 million mt (+2.9%), but the +4.81 million mt increase in steel billets was nearly double the net growth (+2.48 million mt). Excluding steel billets, finished steel products still posted approximately -3.0%, confirming that the "steel billet as the main growth driver" pattern remains unchanged.

By product:

Steel billet (+4.81 million mt/+52.1%): August single-month volume was approximately 1.93 million mt, pulling back MoM. The earlier judgment that "the high base creates expectations for a pullback" is now materializing (Southeast Asia destocking + narrowing price spreads), but supply disruption substitution is providing a floor, and overall performance has not lost momentum.

Hot-rolled coil (-3.53 million mt/-21.5%): The decline narrowed compared with January-July. August single-month volume of approximately 1.99 million mt turned positive YoY (the August base last year was only about 1.76 million mt), suggesting that the most severe phase of anti-dumping impact may have passed.

Cold-rolled coil (+890,000 mt/+26.5%) posted the fastest growth: product shifting after hot-rolled restrictions + ASEAN manufacturing demand. The three long steel products combined increased by 1.84 million mt at a steady pace.

Coated steel (-1.04 million mt): August volume of 2.31 million mt was down 2.6% MoM, weighed down by the concentrated implementation of new trade barriers from South Korea (provisional galvanizing duties of 22.34%-33.67%) and Turkey (final rulings of 22.37%-32.40%), with overall performance remaining weak.

Data Source: SMM, General Administration of Customs

By country:

Indonesia (+1.54 million mt): Its position as the top destination for steel billets remains solid. The core logic of Chinese semi-finished products filling the ASEAN supply gap after Iran's supply disruption remains unchanged. This is further supported by infrastructure ramp-up including the new capital Nusantara, and the stable channel formed by Chinese-invested rolling mills' "import billet → local rolling" model, with August single-month volume increasing by another 140,000 mt. It is also particularly noteworthy that Indonesia's dry season peaked in August 2026. According to BMKG, the number of Seasonal Zones (ZOM) at peak dry conditions was 83 in July (approximately 12.26% of the country's land area), surged to 369 in August (48.84%), and pulled back to 169 in September (25.41%), with relief only arriving after the rainy season begins in mid-October. Java, Bali, Sulawesi, and other regions were all in peak dry zones in August, and Cilegon (West Java), one of Indonesia's major steel billet production sites, was among the areas most severely affected by drought. As a result, the absence of local supply combined with the increased attractiveness of low-priced Chinese resources jointly drove the upward shift in incremental volumes.

Nigeria (+680,000 mt) + Africa sector: infrastructure boost, entrepot hub. Nigeria is the largest growth market in Africa this period, with urbanization and local undersupply driving imports; Djibouti continues to function as an East African entrepot hub, absorbing demand from hinterlands such as Ethiopia and Somalia, with port and infrastructure projects continuing to expand. However, divergence within Africa is evident, with Tanzania, Senegal, and others contracting simultaneously, highlighting significant differences in regional demand and payment capacity.

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