China semi exports surge as Iran supply disruption drives March spike

• March volumes jump to 1.55 mnt amid supply disruption
  
  
• Indonesia, Saudi Arabia, Turkiye emerge as key destinations
  
  
• Iran supply gap redirects trade flows toward China
  
  

China's semi-finished steel exports picked up sharply in March 2026, reaching 1.55 mnt. What stands out is how strong this jump was--March alone accounted for nearly 90% of the combined January--February volume (1.75 mnt). Compared to 1.0 mnt in March 2025 and just 0.35 mnt in March 2024, the growth is quite significant.

The first two months of the year were already steady, with exports at 0.85 mnt in January and 0.9 mnt in February, but March clearly changed the pace. This builds on the trend seen last year as well, when exports consistently stayed above 1 mnt from mid-2025, peaking at 1.75 mnt in August. Overall, it shows how China has been gradually strengthening its position in the semi-finished steel market.

Destinations reflect strong Middle East and SEA pull

Looking at where the material is going, demand has been largely concentrated in Southeast Asia and the Middle East. Indonesia remained the largest buyer at 306,000 t, followed by Saudi Arabia at 260,000 t and Turkiye at 140,000 t. Countries like Djibouti, Italy, and the UAE also featured prominently. Chinas ferrous exports remain concentrated in Indonesia, Saudi Arabia, Turkey, Djibouti, and Italy, with these five markets receiving ~90% of the top10 volume

This pattern suggests that buyers in these regions are increasingly relying on imported semis, especially at a time when scrap costs and production expenses remain elevated.

Recent market developments (Feb-Apr 2026) show that China's surge into Middle East and Southeast Asian ports closely aligns with Iran's disturbance in billet and longs trade. The Red SeaHormuztype disruptions, naval blockades, and sanctions have reduced Iran's exportable billet and rebar volumes, creating a window for Chinese exporters.

Iran disruption drives China's export spike

Recent developments between February and April 2026 indicate that China's export surge is closely linked to disruptions in Iran's billet and long steel trade. Geopolitical tensions, naval restrictions and logistical challenges across key routes, including the Strait of Hormuz, have significantly reduced Iran's exportable volumes.

Iranian billet exports are estimated to have declined by 30-50% in early 2026, with trade largely shifting to overland routes and limited spot cargo availability. Export activity has increasingly been confined to tenders, with prices heard at $425-430/t FOB, while actual deals were concluded lower at around $400-410/t exw for neighbouring markets such as Iraq, Afghanistan, and CIS countries. Some cargoes were also routed via Turkiye at approximately $410-415/t FCA.

At the same time, operational disruptions at major producers, particularly Khuzestan Steel Company, further reduced exportable surplus. Mills have also prioritised domestic demand -- limiting export availability of both billet and rebar. Rebar exports remained constrained due to port access issues and routing challenges, with trade largely restricted to overland shipments.

China captures displaced demand

With Iranian supply constrained, buyers in Southeast Asia and the Middle East increasingly turned to China for reliable cargoes. China's integrated mills, supported by efficient port infrastructure, were able to quickly reroute billet and rebar shipments to operational ports across these regions.

This shift is also reflected in pricing trends. For instance, CFR Thailand and Philippines billet prices increased from around $450-455/t in mid-February to $480-490/t by late March, indicating tightening supply and stronger reliance on Chinese semis.

The March export spike of 1.55 mnt can therefore be directly linked to Iran's disruption, as Chinese exporters captured a larger share of demand in key import markets.

Outlook

China is likely to remain a key supplier of semi-finished steel as long as Iranian exports stay constrained, especially in markets like the Middle East and Southeast Asia, where buyers are actively looking for reliable alternatives. That said, if supply from Iran starts to normalise, some of this demand could shift back, easing China's recent export momentum.

At the same time, a bigger structural shift is also taking shape. Industry discussions suggest China's total steel exports could settle around 100 mnt annually in 2026, lower than the elevated levels seen in 2025. This isn't due to a sudden drop in demand, but rather a deliberate adjustment.

China is tightening control over crude steel output and new capacity additions for the 2026-2030 period, signalling a move away from pushing excess volumes into export markets. Alongside this, a new export licensing system covering around 300 steel product categories is expected to come into effect from 2026, which could further regulate volumes and gradually shift focus toward higher-value products.

Global trade conditions are also becoming more restrictive. Increasing duties and trade barriers across key importing regions are likely to limit export growth, with market estimates pointing to a potential reduction of 15-20 mnt compared to 2025 levels.

On the domestic side, demand is expected to soften gradually, with continued weakness in the property sector offsetting stable infrastructure activity. This reduces the pressure on mills to export every surplus tonne. In that context, while short-term spikes--like the March surge linked to Iran's disruption--may still occur, the broader direction suggests a more balanced approach, with China focusing less on volume and more on value in its export strategy.