Date: March 1, 2026
By: Aｍy
While domestic demand and policies shape China’s steel market, it is not an island. In the past two weeks, movements in the international ferrous scrap market have created interesting arbitrage opportunities and highlighted the interconnected nature of raw material costs.
Reports from Fastmarkets indicate a significant uptick in scrap prices. Japanese H2 scrap offers to Vietnam surged to $455-460 per tonne CFR by late February, up sharply from earlier in the month . This narrowing spread between scrap and billet has a direct consequence: it has prompted Chinese buyers to seek imported billet .
This is a fascinating dynamic. High scrap costs make domestic steelmaking in China more expensive. As a result, Chinese traders have turned to buying billet from Vietnam and other Southeast Asian producers, where offers have climbed to over $580 per tonne FOB .
For your procurement strategy, this creates a layer of complexity. The floor price for China’s domestic billet is now partially supported by the international scrap market. If Chinese mills are willing to import billet, domestic sellers will be reluctant to offer deep discounts. Furthermore, the anticipated reduction in China’s semi-finished exports due to the new license system could tighten billet availability in Southeast Asia, potentially driving regional prices higher. Tracking global scrap prices is no longer just a cost input exercise; it’s a direct window into China’s supply-demand balancing act.