The head of the World Steel Association has stated that addressing China’s chronic overcapacity problem will not be achieved quickly, given the deep links between the steel industry and the broader Chinese economy.
Edwin Basson, Director General of the association, told Bloomberg that “shutting down just one steel plant can have far-reaching effects on the entire local economy,” noting that “there is no practical short-term solution.”
China’s steel sector, with an annual capacity of around one billion tons, is grappling with significant oversupply after years of expansion that surpassed current demand levels. The prolonged slump in China’s property market has further weakened domestic demand, pushing Chinese producers to offload excess supply into global markets at low prices. This has intensified pressure on steelmakers in other countries and heightened trade tensions.
Steel was among the first products targeted by the tariffs imposed earlier this year by U.S. President Donald Trump. Several countries — including Vietnam — have also introduced anti-dumping duties on Chinese imports, undermining nearly two decades of relatively open global steel trade.
Basson noted that “the open market we enjoyed from 2000 to 2020 is fading,” emphasizing that the ability to move materials freely across continents remains vital for the industry.
The association expects Chinese steel demand to decline by 2% in 2025 and another 1% in 2026 — an extended downturn that is driving producers to export near-record volumes despite rising protectionist barriers.
Meanwhile, Rizwan Janjua, the association’s Head of Technology, warned that the fragmentation of the global market will not only strain trade but also hinder decarbonization efforts in a sector responsible for about 8% of global CO₂ emissions.
Janjua told Bloomberg that major progress on decarbonization requires extensive international coordination on energy and regulatory policy, despite the availability of the necessary technologies. “Unless countries cooperate, each will focus solely on improving its own position — at the expense of collective progress,” he said.
