A senior executive at Japanese steelmaker Nippon Steel has indicated that the prolonged steel oversupply in Asia driven by Chinese exports could be approaching its end, potentially paving the way for market stabilization, according to media reports.
Nippon Steel chief financial officer Takahiko Iwai said Chinese exporters are increasingly struggling to maintain profitability overseas, as regional markets have become oversupplied and trade restrictions have reduced available export destinations.
China, the world’s largest steel producer, expanded exports to offset weak domestic demand linked to its property sector downturn. Although overall production declined last year, China’s steel exports increased by 7.5 percent to a record 119 million mt in 2025.
Trade barriers and licensing system tighten export channels
Growing protectionism has led countries including Vietnam, South Korea and Australia to introduce antidumping measures. Japan has also launched an antidumping investigation into certain Chinese and South Korean steel products, including hot dip galvanized coil, sheet and strip.
While China has sought to redirect shipments toward markets with fewer restrictions, such as the Middle East, and has increased exports of semi-finished products, new domestic controls may constrain future volumes. Since January 1, Beijing has implemented a broad licensing system covering various steel products, signaling efforts to rein in outbound shipments, as SteelOrbis reported previously.
Iwai stated that the Asian steel market may be “nearing the bottom”, although he did not provide a specific timeline for recovery.
Financing review amid US Steel acquisition
Separately, Nippon Steel is reviewing financing options as a JPY 2 trillion ($13 billion) bridging loan used to fund its $14.1 billion acquisition of US Steel approaches maturity in June.
The outstanding balance has been reduced to approximately JPY 1.3 trillion through repayments financed by hybrid loans and other instruments. However, total interest-bearing debt doubled to JPY 5.3 trillion by December 2025 compared to March 2025.
While market reports suggest the company may consider issuing up to JPY 500 billion ($3.22 billion) in convertible bonds, Iwai stated that no final decision has been taken.
