China is stepping up efforts to combat “involution”-style competition in its steel sector. This was stated by Xia Nong, vice president of the China Iron and Steel Association (CISA), at a conference on the subject, according to China Daily.

This involves introducing stricter controls on steel production, exploring new capacity management mechanisms, and coordinating efforts among the government, industry, and enterprises.

Xia Nong believes it is crucial to strictly prohibit the addition of new capacity, create opportunities for decommissioning existing facilities, and gradually phase out outdated equipment with obsolete technologies, high pollution levels, and low efficiency. Additionally, a mechanism is needed to guide enterprises in strengthening self-discipline.

The CISA vice president noted: 2026 will be a decisive year for China’s steel industry in advancing the campaign for capacity reduction, structural optimization, quality improvement, and transformation.

According to the National Bureau of Statistics, the country’s steel output fell by 4.4% year-on-year last year to 961 million tons, while apparent consumption of steel products dropped by 7.1% year-on-year to 829 million tons. Steel production in 2025 rose by 3.1% to 1.45 billion tons.

Wen Gang, director of the Steel Division of the Raw Materials Industry Department at the Ministry of Industry and Information Technology, stated that the mismatch between ample supply and weak demand continues to grow.

“On the supply side, efforts must focus on controlling new capacity, optimizing existing capacity, and regulating production. On the demand side, it is important to tap into the potential for metal product consumption, promote the use of steel structures, and advance the modernization of steel and related materials,” he explained.

It is planned that expanding the scope of application for metal products will be a key approach to resolving the imbalance. In particular, last year, steel consumption by the country’s manufacturing sector surpassed that of the construction sector for the first time—the latter’s share fell to 49% from 58% in 2020. At the same time, the manufacturing sector’s share has grown from 42% to 51% over the past five years.

Zhong Shaoliang, chief representative of the Beijing office of the World Steel Association, noted that in the long term, global demand for steel still has significant growth potential. Furthermore, he said, the global steel industry’s transition to low-carbon operations in the future will have far-reaching implications, affecting both direct and indirect trade in steel products.

It is worth noting that Chinese steelmakers are coordinating their efforts in response to the European CBAM. Among the key issues of concern to the country’s steel producers are the recognition of emission factors, pre-verification procedures, testing methodologies, and data security.

Courtesy: https://gmk.center/en