Recently, the global import and export market for steel and upstream raw materials has shown significant structural changes, focusing on two core themes: Indonesia’s explosive growth in stainless steel billet exports to the EU, forming a new cross-border division of labor system; and a sharp month-on-month decline in global iron ore shipments, with significant reductions from Australia and Brazil, the two core producing regions.
These dual changes will further affect the supply-demand balance and price trends of the global steel industry.
(I) Indonesia → EU: Stainless Steel Billet Exports Surge 350%, Italy Becomes the Core Destination
Data jointly released by Eurostat and industry institutions on March 4th shows that in 2025, the EU’s imports of stainless steel billets from Indonesia surged 350% year-on-year, with a total import volume of 250,000 to 300,000 tons. Most of these goods ultimately flowed into Italy’s stainless steel deep processing links, becoming an important raw material supply source to support local manufacturing capacity. This change also marks the further deepening of the cross-border division of labor pattern in the global stainless steel supply chain.
The explosive growth in Indonesia’s stainless steel billet exports to the EU is driven by dual factors on both the supply and demand sides, forming a clear division of labor system of "smelting in Indonesia and deep processing in the EU". From Indonesia’s perspective, relying on its unique nickel-iron resource advantages, it has become a core hub for global stainless steel production. Indonesia has the world’s largest nickel reserves, and nickel, as a key raw material for stainless steel production, sufficient local supply has greatly reduced the raw material transportation costs in the smelting link, providing solid cost support for stainless steel billet production. At the same time, Indonesia’s stainless steel production capacity continues to expand. Global steel giants such as China’s Tsingshan Holding Group and South Korea’s POSCO have successively laid out production capacity in Indonesia, further expanding the local supply capacity of stainless steel billets and enabling large-scale exports.
In contrast, the contraction of local stainless steel production capacity in the EU market is the core reason for its increased imports from Indonesia. Data shows that 25 years ago, Europe accounted for 40% of global stainless steel production, but by 2025, this proportion has dropped to less than 10%. There is a gap of up to 25% between stainless steel production capacity and demand within the EU, and local steel mills are unable to meet the needs of downstream deep processing. In addition, the ongoing energy crisis in Europe has pushed the energy cost ratio of the metal industry to as high as 26%, putting European steel mills at a significant disadvantage in cost competition. Many steel mills have successively suspended or reduced production, further exacerbating the local supply gap, which can only be filled by imported billets. Against this background, Indonesian stainless steel billets have become the preferred choice in the EU market due to their cost advantages, ultimately forming a cross-border division of labor pattern of "raw materials - smelting - deep processing".
It is worth noting that this export growth forms a close cost transmission chain with the increase in the alloy surcharge for Tsingshan’s 316 series stainless steel in Indonesia. As a core enterprise in Indonesia’s stainless steel industry, Tsingshan Holding Group has recently raised the alloy surcharge for 316 series stainless steel multiple times, with a cumulative increase of 200 US dollars per ton in ten days, mainly due to the continuous sharp rise in the prices of alloys such as chromium and molybdenum. This cost pressure will be transmitted to the EU’s downstream deep processing links through stainless steel billet exports. Coupled with the persistently high local energy costs in the EU, the prices of terminal stainless steel products in the EU may come under further pressure in the future, thereby affecting the procurement costs of local downstream manufacturing industries.
(II) Global Iron Ore Shipments Drop Sharply Month-on-Month, Significant Reductions in Australia and Brazil
At the same time, the global iron ore shipping market has shown an obvious cooling trend, with the sharp decline in shipments from core producing regions being the main drag. According to the latest data released by Mysteel, in the week from March 2nd to March 8th, the total global iron ore shipments were only 28.978 million tons, a decrease of 4.429 million tons month-on-month, a significant drop, reflecting a phased slowdown in the global iron ore supply rhythm.
From a regional perspective, the two core global iron ore producing regions, Australia and Brazil, have the most prominent shipment reductions, becoming the main force driving the decline in global shipments. Data shows that the total iron ore shipments from Australia and Brazil this week were 23.421 million tons, a decrease of 3.485 million tons month-on-month. The shipments from the two regions account for more than 80% of the global total shipments, and their shipping dynamics directly determine the global iron ore supply pattern.
Industry analysts point out that the decline in shipments from the two regions is mainly disturbed by natural factors. In Australia, recent hurricane weather in the nearby sea areas has significantly restricted the iron ore loading and shipping rhythm, leading to a slight drop in shipments; in Brazil, continuous rainfall in the southern and southeastern regions has affected mine mining and transportation efficiency, making the shipments of major mines significantly lower than the previous level, which is the core reason for this shipment reduction.
In addition, the high global iron ore port inventory has also affected the shipping enthusiasm of mines to a certain extent. Currently, the global iron ore port inventory remains at a high level of about 178 million tons, and steel mills’ spring stockpiling has basically ended, with procurement demand tending to be stable. Mines do not need to rush to increase shipping efforts. However, the sharp month-on-month drop in shipments will still provide some support for iron ore prices in the short term. But considering the pressure from high inventory, the room for price increase is limited. It is expected that the global iron ore market will maintain a "tight supply-demand balance" operation. In the follow-up, we need to continue to pay attention to the weather changes in Australia and Brazil’s producing regions and the adjustment of steel mills’ procurement demand.
