The output of the world’s largest steel industry, China, fell 1.7% last year, a fact that continues to raise many questions about its future direction. This drop continued the downward trend from the 2020 peak of 1.065 billion tons, bringing the 2024 output down to 1.005 billion metric tons.
However, even as China’s own steel consumption dropped, the country exported 110.72 MT of steel in 2024. This figure is about 22 % higher than the year before and represents a nine-year record.
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Steel Industry Output Tells a Complicated Story
China’s property sector faced significant challenges last year, with some media reports claiming that sales among the country’s top 100 property developers dropped. Meanwhile, China’s infrastructure sector, which many had hoped would boost steel demand, also fell short. Starting September 1, 2024, the Ministry of Finance urged local governments to limit bond issuance for infrastructure projects to mitigate debt risks.
According to this report, some local governments were running fiscal deficits and struggling to pay for construction steel on time. Meanwhile, the weakened demand for steel has forced mills to cut production, reducing their need for raw materials like iron ore, coke and ferroalloys.
On the other hand, some experts quoted in the Reuters report felt that the Chinese steel industry demonstrated exceptional endurance in the face of this slump. They cite the fact that mills were able to keep production levels within the range of 70 million tons from 2019 to 2024.
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What Will Happen in 2025?
It is far too early in the year to predict where exactly China’s steel sector will find itself for the rest of 2025. There are simply too many “ifs” involved. If there is some degree of recovery in China’s faltering residential real estate market or if the country’s economy recovers, things could look up. However, there is also the distinct possibility of trade penalties from the new U.S. administration under President Donald Trump.
Most experts seem to agree that a reviving domestic economy, stable or increasing building activity and low trade tariffs would be the best conditions for China’s steel industry in 2025. Under such circumstances, Reuters predicts that the robust demand for iron ore may continue, and steel production might stay stable at about 1 billion tons.
Steel Exports May Not Remain Robust
The U.S. is not the only nation that could impose trade barriers on cheap Chinese steel imports. The increase in exports from China has also caused concern among countries like India, which continues to work to expand its own steel sector.
Even in Europe, Chairman of ArcelorMittal France, Alain Le Grix de la Salle, recently warned that if the EU failed to tackle unfair competition from imports, there were very high chances that a third of the European steel industry might vanish. Over the previous five years, the demand for steel has decreased by 20% due to rising energy costs and other factors.
Until the European Union updates its carbon border adjustment mechanism and introduces new programs like the Steel and Metals Action Plan in 2025, investment plans in Ghent will remain uncertain. Indeed, the Chairman stated that ArcelorMittal has already suspended decarbonization investments at its Dunkirk facility.
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India and Other Countries Seek to Curtail Excess Imports
Indian steel companies have been protesting against cheap Chinese exports for years, demanding that the government clamp down on the excess as the country races to develop its own steel sector.
In an exclusive interview with The Hindu BusinessLine, India’s Steel Minister, H.D. Kumaraswamy, said that the global steel market was under significant pressure due to excess supply from China and weak demand. He added that the ministry has intensified its monitoring efforts to address the risk of cheap imports and potential dumping from China. India’s steel ministry is reportedly also exploring the imposition of countervailing and anti-dumping duties.
Recently, Vietnam initiated an anti-dumping investigation into China-origin hot-rolled coil. Similarly, Turkey has imposed tariffs of 20.56-57.75% on Chinese HRC. Finally, Canada also decided to enforce a 25% tariff on China-origin steel as well as a 100% tariff on electric vehicles, which will start in October 2024. Do you want to stay ahead of steel industry fluctuations such as these? Discover how MetalMiner Insights empowers you to optimize metal sourcing for maximum cost savings and ROI. Learn more.
