The sale, involving 40,000 tonnes of billet, was concluded in early June for August shipment. It is expected to arrive at the eastern Chinese inland port of Jiangyin, located along the Yangtze River, by the end of September.

The transaction is the first time that Aceros Arequipa has sold the billet it produces for export and is also its inaugural export of self-produced steel across the Pacific Ocean.

Aceros Arequipa’s capacity is currently at 850,000 tonnes per year but it will start up a new electric-arc furnace (EAF) at its Pisco works in 2021 to replace its existing facility, which will be kept in reserve. The new 1.25-million-tpy unit was first announced in 2018.

The steelmaker will be able to export more billet from the second half of 2021, the company official said.

Chinese buyers have regularly paid more for steel billet this year than their competitors in Southeast Asia, which tempts an increasing number of steelmakers to export the semi-finished product to China.

The most-recent billet deal to China was concluded earlier this week and involved Vietnamese blast furnace-produced billet priced at $433 per tonne fob. The sale has led to a rise in offers to Southeast Asia up to levels that buyers in that region will not contemplate.

In the first six months of 2020, China imported 3.06 million tonnes of billet under HS code 72071100, which is 33 times higher than the 92,448 tonnes imported in the same period of last year, according to Chinese customs data.

Market participants expect China to continue purchasing large quantities of the product over the remainder of 2020 amid steelmaking restrictions in the Tangshan region and rising demand for long steel as a result of new housing projects.