Decline in construction demand reduced production, while rolled steel exports rose to record levels

Steel production in China fell below 1 billion tons in 2025, reaching its lowest level since 2018. According to the National Bureau of Statistics of China, the country produced 960.81 million tons of steel last year, which is 4.4% less than in 2024. The decline was the result of a protracted crisis in the real estate market, which significantly limited domestic demand for steel products.

In December, steel production in China decreased by 2.4% month-on-month to 68.18 million tons, the lowest level since December 2023 and the seventh consecutive monthly decline. In annual terms, the figure decreased by 10.3%.

Chinese steel companies will face profitability issues in the second half of 2022, but the situation will improve somewhat in 2025. Analysts attribute this to manufacturers’ shift towards flat steel production, particularly hot-rolled coil, which enjoys more stable demand in both domestic and foreign markets. Flat steel forms the basis of Chinese steel exports.

Steel exports from China in 2025 rose to a record high of over 119 million tons. At the same time, the share of rebar, traditionally used in construction, fell to 13% of total production in the first 11 months of the year, compared to 23% in 2019.

Mysteel estimates that in 2025, an average of 54% of Chinese steel mills were profitable, while in 2024, this figure was only 36%.

Analysts expect production to continue declining in 2026, although the pace of decline will slow. According to Lange Steel’s forecast, steel production may decrease by another 3% or so. At the same time, Beijing has announced its intention to continue to strictly regulate steel production volumes and prevent the emergence of illegal new capacities in 2026-2030 as part of its carbon emission reduction policy.

It should be noted that at the end of last year, the Chinese Ministry of Commerce (MOFCOM), together with the General Administration of Customs of the PRC, announced the introduction of export licensing for some steel products. For Chinese steelmakers, this may limit the flexibility of exports as a market balancing tool, increase administrative costs, and force some companies to adjust their production plans, while the global market is increasingly likely to restrain export flows from China in 2026.

As reported by GMK Center, Chinese steel companies reduced steel production by 1.7% year-on-year in 2024, producing 1.005 billion tons. This is the lowest figure in the last five years. Experts note that 2024 is likely to be the last year when steel production in China exceeded 1 billion tons.

Source:GMK Cente