China will step up efforts to address “involution-style” competition in its steel sector by tightening crude steel output controls and advancing capacity governance reforms, China Iron and Steel Association (CISA) vice president Xia Nong said.
Last year, Chinese authorities have launched an “involution” campaign aimed at curbing excessive competition and aggressive price wars in sectors such as steel and automotive, which have contributed to deflationary pressures.
Measures will focus on strictly limiting new capacity additions, accelerating the phase-out of outdated and inefficient facilities, and establishing long-term mechanisms to guide industry discipline, Xia said at the 2026 Steel High-Quality Development Conference in Beijing.
He added that 2026 marks a key year under China’s 15th Five-Year Plan, with priorities including improving product quality, enhancing energy and carbon efficiency, and accelerating digital transformation, alongside industry consolidation and resource development.
Supply-demand imbalances remain a key concern. China’s crude steel output declined 4.4pct YoY to 961 mln tons in 2025, while apparent consumption fell 7.1pct to 829 mln tons.
Officials said the mismatch between supply and demand continues to widen, highlighting the need for coordinated action. On the supply side, efforts will focus on controlling capacity and output, while on the demand side, authorities aim to expand steel applications and promote upgrades in steel-intensive sectors. Manufacturing has overtaken construction as the largest steel-consuming sector. Expanding steel applications is expected to support market rebalancing.
Industry officials also highlighted the importance of digitalization and decarbonization, noting that the low-carbon transition is expected to reshape global steel trade and increase the role of direct reduced iron (DRI) and other low-emission inputs.
