Rumors circulating in the Chinese market indicate that domestic steelmakers with capacities exceeding 10 million mt will be required to cut crude steel output by 300,000 mt per month as of May 1 this year, while steelmakers with capacities lower than 10 million mt will be required to reduce crude steel output by 100,000 mt per month, with the aim of reducing China’s overall crude steel output by 50 million mt in 2025.
On April 28, major Chinese steelmaker Baosteel, part of one of the world’s biggest steel producers, Baowu, held a briefing regarding its first quarter results. When asked about the rumors in question, Baosteel deputy general manager Cai Yanbo said, “It is highly possible to implement the cut in crude steel output as has been mentioned in the government report.”
However, Cai also said that he did not expect the reduction would be “implemented this month or next month; and the company has conveyed to the relevant authorities that the controlling measures for crude steel output cannot be generalized.” The output reduction could ensure the healthy development of the steel market, bolstering steel prices and also affecting prices of raw materials for steelmaking.
Due to the US President Trump’s tariff hikes, China’s steel exports in 2025 are likely to decline by 15 million mt, while its indirect steel exports (exports of finished products like containers, machinery, vehicles, etc.) will decrease by 20 million mt, Baosteel chairman Zou Jixin stated.
China has stated that it plans to reorganize the steel industry through output reductions, while the details, including the specific timing and scale of the reductions have not been disclosed.
Zou said he expects China will issue more stimulus measures to deal with external changes. In 2024, China’s steel exports amounted to 110.72 million mt, the highest level in the past nine years, so for 2025 Baosteel expects 95-96 million mt of direct steel exports from China. Meanwhile, Baosteel’s steel exports totaled 6.07 million mt in 2024, hitting a record high level. However, the company has not disclosed its export target for 2025.
Zou also forecast that China’s steel consumption in 2025 will decline by two percent, which is in line with analysts forecasting a decline of up to three percent, while the China Iron and Steel Association (CISA) expects a total decline of around one percent decline this year.
China’s real estate industry is expected to remain in a downward cycle. At the same time, supply of iron ore is expected to rise by 40.0 million mt in 2025 and so average iron ore prices will see a decline during the year.
