MC-CCPIT: Crude steel demand in China expected to further decline to around 850 million mt in 2025

SteelOrbis talked to Dr. Su Buxin, executive deputy secretary general of CCPIT, regarding latest developments in China.

Can you tell us about your organization?

The Metallurgical Council of the China Council for the Promotion of International Trade (CCPIT) was established in 1988, jointly founded by the China Iron and Steel Association (CISA) and CCPIT, with Mr. Liu Andong serving as its chairman. The Council is an organization dedicated to promoting foreign trade and economic-technological cooperation in China's metallurgical industry, and serves as a consulting body for the international cooperation of China's steel industry. The Council is committed to organizing various forms of international exchange activities involving domestic and international steel industry enterprises, research institutes, and other institutions. It promotes foreign trade and economic-technological cooperation for Chinese enterprises and facilitates exchanges and cooperation by introducing foreign enterprises, R&D institutions, and trading companies to China. The Council's main businesses cover the following areas: Firstly, building international cooperation platforms by organizing and hosting international exhibitions, conferences, and technical exchange activities, including organizing enterprises to participate in exhibitions abroad and hosting exhibitions overseas. Secondly, providing technical consultation to the Chinese government for formulating policies related to the international development of the steel industry. Thirdly, offering engineering technology and investment consulting services for the overseas development of global steel enterprises. Fourthly, assisting CISA in its external liaison work and the organization and coordination of major foreign-related activities.

"China International Steel Week (CISW)" is an important undertaking of the Council, held annually in August. Over the course of a week, it hosts over 20 international conferences, exchange seminars, technology and product exhibitions, and business negotiations, covering aspects such as global steel industry chain production, R&D, development strategies, and management optimization. CISW has become a crucial window for the world to understand China's steel industry and has built a bridge for global steel trade, communication, exchange, and cooperation.

How do you see the current situation in the Chinese domestic steel market in terms of demand, especially considering the slowdown in the construction and real estate segments? What are the expectations for steel production reductions?

Currently, China's economy is in a phase of transformation and development. While apparent steel consumption shows an overall downward trend, it remains at a high level with fluctuations over a certain period. According to CISA data, China's apparent consumption of crude steel in 2024 was 892.77 million metric tons, a year-on-year decrease of 4.7 percent. Demand is expected to further decline to around 850 million metric tons in 2025. However, the demand structure is diverging:

1. In 2024, the proportion of steel used in China's manufacturing sector reached 50 percent for the first time. It is expected that manufacturing, especially high-end manufacturing, will become the mainstay of China's steel demand in the future. Emerging industries such as wind power, photovoltaics, new energy vehicles, industrial robots, marine engineering, and high-end equipment manufacturing show considerable growth potential for steel demand. New infrastructure areas like ultra-high voltage power transmission, rail transit, and big data centers will also contribute to incremental demand.
2. Demand for construction steel in China will gradually shrink, but urban renewal initiatives will create new demand. Construction steel will develop towards high-strength, weather-resistant, and corrosion-resistant specifications. China is currently vigorously promoting prefabricated steel structure buildings, and it is expected that the market share of section steel and stainless steel will gradually increase.
3. China's steel exports reached a high of 110 million mt in 2024, but they also face pressure from trade friction. Against the backdrop of an increasing number of antidumping and countervailing (AD-CV) investigations and trade review cases initiated by multiple countries targeting Chinese steel, such substantial export volumes may be difficult to sustain.

The Chinese government has implemented a crude steel output regulation policy since early 2021 based on domestic market demand. From 2021 to 2024, crude steel production decreased from 1.035 billion mt to 1.005 billion mt, a cumulative reduction of 2.90 percent. Crude steel output in China is still expected to decrease by more than three percent in 2025. From a policy perspective, the State Council issued the "2024-2025 Energy Conservation and Carbon Reduction Action Plan" at the end of May 2025, and the "Special Action Plan for Energy Conservation and Carbon Reduction in the Steel Industry" issued by the National Development and Reform Commission (NDRC) and other departments both mention the continuation of crude steel output regulation for 2024-2025. By the end of 2025, China's crude steel output will be reduced to 1.003 billion mt. They also require that the comprehensive energy consumption per metric ton of steel decrease by more than two percent by the end of 2025 compared to 2023. Energy-saving and carbon-reduction retrofits in the steel industry, along with the renewal of energy-consuming equipment, are expected to save approximately 20 million mt of standard coal and reduce CO2 emissions by about 53 million mt. From January to May 2025, China's cumulative crude steel output was 438 million mt, a decrease of 6.015 million mt compared to the same period last year. According to data from a well-known domestic steel information website, as of June 4, 2025, crude steel production restrictions across various regions in China have shown significant results, with a total reduction of approximately 30 million mt.

What do you expect from the government in terms of stimulus measures to support real estate sector and the real economy in the coming 12 months?

Since 2024, the Chinese government has introduced a series of "package" policy solutions from the top down to boost the real estate sector and revitalize the real economy.

Regarding stimulating the real estate sector:

1. Increased financial support: including batch reductions in existing mortgage rates, lowering down payment ratios, and expanding re-lending for affordable housing projects.
2. Significant tax optimization: including preferential deed taxes and simplification of VAT policies.
3. Land and development policy adjustments: including installment payments for land transfer fees and dynamic balance in land supply.
4. Boosting home purchase demand: including an across-the-board relaxation of home purchase/sale restrictions, increased home purchase subsidies in some regions, raising the upper limit for provident fund loans, and abolishing the inclusion of shared common areas in saleable area calculations.

Following these combined policy measures, the decline in national commercial housing sales area narrowed to 2.9 percent from January to May 2025. In the short term, the real estate sector is showing signs of recovery and improvement. China's real estate stimulus policies can be considered comprehensive, but the key lies in building consumer confidence and creating new consumption areas.

In terms of supporting the real economy:

1. Tax and fee reductions, and special bond issuance: For example, the VAT additional deduction ratio for advanced manufacturing enterprises was raised to five percent, and the government issued a total of RMB 3.9 trillion in new special bonds in 2024.
2. Promoting industrial upgrading and structural optimization: such as vigorously promoting equipment renewal and consumer goods trade-in programs, and advancing ultra-low emission retrofits in the steel and coking industries. The "Industrial Structure Adjustment Guidance Catalog (2024 Edition)" strengthens support for high-end manufacturing, green energy, the digital economy, etc.
3. Expanding corporate R&D investment: for example, central government spending on science and technology increased by eight percent year on year, focusing on supporting basic research and breakthroughs in key core technologies.

Under the positive influence of the above policies, China's value-added output of industrial enterprises above designated size grew by 4.6 percent in 2024, and manufacturing investment grew by 6.2 percent.

What can you tell us about the future trend of Chinese steel exports?

Regarding steel exports, the Chinese government flexibly adjusts policies around the following four objectives:

1. Prioritizing domestic demand: since 2021, the government has gradually abolished export tax rebates for some steel products, with the starting point and goal being to prioritize meeting domestic demand.
2. Encouraging high-value exports: by subdividing tariff codes for high value-added, high-tech steel products to encourage Chinese steel to participate in high-level international cooperation and competition.
3. Reducing iron ore consumption: through measures like encouraging imports of primary steel products (e.g., steel billets) and regulating the import management of recycled steel raw materials.
4. Mitigating carbon tariff impact: by optimizing steel product import/export policies and trade structures to actively respond to carbon emission tariff policies in the EU and other regions, reducing their impact on China's trade.

China's steel export volume was at a historical high in 2024. In the near term, in absolute terms, China's steel exports will inevitably decline. The government will focus on restricting exports of low-end steel products to maintain the global competitiveness of China's steel industry. The reasons are as follows:

1. Increasing trade remedies: numerous ADCV cases against China implemented by multiple countries are creating obstacles for China's participation in global steel trade. Many of these cases will enter the arbitration phase in 2025, significantly increasing pressure on direct steel exports.
2. Impact of US tariffs: high tariffs imposed by the US will affect China's performance in indirect steel exports. For example, the US Department of Commerce announced a 50 percent tariff on various steel household appliances (including "steel derivative products" like dishwashers, washing machines, and refrigerators) effective June 23, 2025.
3. Rise of carbon tariffs: "Carbon tariffs" may increase the cost of Chinese steel exports. As is well known, the EU's Carbon Border Adjustment Mechanism (CBAM) has entered its transitional phase. In the future, developed economies like Australia, Japan, and Canada are also considering establishing "carbon tariff" systems similar to those of the EU and the UK, which could bring more uncertainty for Chinese steel exporters.

With Trump’s ever-changing tariffs decisions, as well as widespread protectionism around the globe, how do you expect the Chinese steel industry to be affected?

Although China and the US recently reached an agreement for a 90-day suspension of high tariffs on Chinese goods by the US, the Sino-US trade friction is not over, especially concerning steel and related downstream industries. Not long ago, the US announced an increase in tariffs on imports of steel, aluminum, and derivative products from 25 percent to 50 percent, effective June 4. The US Department of Commerce also announced the aforementioned 50 percent tariff on steel household appliances effective June 23, 2025. We believe the impact of US tariff policies on the direct export of Chinese steel products is relatively small. In 2024, China's steel exports to the US were only 891,700 mt, accounting for a mere 0.81 percent of China's total steel exports. Even considering transshipment trade, the volume of Chinese steel exports affected by US tariff adjustments is below 11 million mt. Overall, we must be concerned about the uncertainty and "capriciousness" of US government tariff policies and the damage they cause to global economic growth and the global trade order. However, specifically for China's steel industry, this series of actions by the US will not have a major impact.