China Fills Steel Gap Created by Crippling of Iran’s Industry

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(Bloomberg) — China has pushed its exports of semi-finished steel to near record volumes as it fills a gap created by a slump in shipments from Iran, which was a significant supplier before this year’s war.

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Iran was a major exporter of steel billet or slab, basic products that are often shipped to plants elsewhere for reworking into more specialized forms. But the US-Israeli attacks on the country’s steel industry — and the blockage of the Strait of Hormuz —  have halted that flow and handed China an opening.

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Exports of semis from China rose to 1.64 million tons in April, just below the record 1.75 million tons exported in August last year, according to customs data. Indonesia and Thailand, both of which have plants that import steel slab for rolling, were the top two destinations.

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“Definitely there have been Chinese semis as replacements for Iranian semis this year,” said Tomas Gutierrez, an analyst at Kallanish Commodities. “Chinese-owned steelmakers in Southeast Asia are also benefiting.”

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Iran’s large steel sector has been targeted in multiple assaults by US and Israeli forces. The country’s biggest producer, Mobarakeh Steel, was forced to halt production, while Khuzestan Steel — a key billet producer — was also hit, and seaborne exports have largely halted.

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The Islamic Republic’s steel exports have been subject to US sanctions for years, but the country had still managed to maintain shipments to other markets. Net exports amounted to about 12 million tons in 2024, according to Citigroup Inc.

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A growing volume of semi-finished products have been a key feature of China’s steel exports over the past two years, as mills contend both with a domestic slowdown and a wave of trade measures worldwide that have largely targeted finished products.

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This Week’s Diary

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