China plans to restructure its steel industry by reducing production, according to the National Development and Reform Commission (NDRC) at the National People’s Congress in Beijing. While specifics on the scope of cuts were not provided, the market speculates that production could be reduced by 50 million tons per year. This marks the first time the National Commission has proposed steel production cuts in its draft plans, indicating the government's intention to regulate steel production this year.
Despite efforts to reduce production linked to carbon emissions, China's annual steel output has remained over 1 billion tons, causing complaints from various countries due to falling domestic demand and strong steel exports. The reduction in production is expected to help meet Beijing’s carbon targets and improve profitability in the steel industry.
In 2024, China’s steel companies reduced production by 1.7% year-on-year, producing 1.005 billion tons, the lowest figure in five years. In 2023, China produced 1.019 billion tons of steel, a 0.6% increase from 2022, halting a two-year decline in production. Experts suggest a 15% reduction in capacity by 2025 is necessary for the steel industry to reduce carbon emissions and return to profitability.
