China said on Friday it will continue to regulate crude steel production and prevent the illegal addition of new production capacity during the 2026–2030 period, in a move aimed at addressing market imbalances and controlling supply.
China, the world’s largest producer and consumer of steel, halted growth in crude steel output in 2021 as part of its plans to curb carbon emissions.
The mandatory production controls come at a time when domestic steel consumption is under severe pressure due to the prolonged downturn in the property market, leaving the sector burdened with excess capacity.
In the first 11 months of 2025, China’s crude steel output fell by 4% compared with the same period a year earlier, putting full-year production on track to drop below one billion tonnes for the first time in six years.
The National Development and Reform Commission (NDRC), the country’s state planner, said in a statement: “The raw materials sector, including steel, is facing a problem of imbalance between supply and demand,” adding that “the raw materials sector needs to deepen supply-side reforms during the 15th Five-Year Plan (2026–2030)… while strengthening the principle of survival of the fittest.”
Strong Exports Trigger External Backlash
Since 2023, Chinese steel exports have remained strong, partially offsetting weaker domestic demand. However, they have also triggered protectionist responses in multiple markets around the world, with several countries accusing cheap Chinese products of harming local manufacturers and prompting the imposition of increasing trade barriers.
On December 12, Beijing unveiled a plan to launch a licensing system starting in 2026 to regulate exports of nearly 300 steel-related products, in an effort to manage trade flows and control export volumes.
(Reuters)
