China’s persistent steel overcapacity remains difficult to address, largely because the sector is deeply intertwined with the broader domestic economy. World Steel Association chief Edwin Basson said that shutting mills would trigger significant economic disruptions, leaving no viable short-term solution, Bloomberg reported.
China’s steel industry expanded rapidly to meet demand that has since faded, particularly amid a prolonged property downturn that continues to dampen domestic consumption. As a result, surplus steel is increasingly being pushed into global markets at discounted prices, pressuring foreign producers and intensifying trade frictions.
Steel was an early target of US tariffs under President Donald Trump, and several countries, including Vietnam, have imposed anti-dumping duties on Chinese products. These measures are reversing nearly two decades of openness in global steel trade, a trend Basson warns is accelerating.
According to World Steel Association, China’s steel demand is expected to fall 2pct in 2025 and a further 1pct in 2026, prolonging the downturn that has forced mills to rely heavily on exports. Chinese customs data shows outbound shipments are on track for a record in 2025, with exports in the first eleven months already exceeding 100 mln tons.
