China’s domestic steel demand continues to slide, raising concerns over future market stability. According to estimates from S&P Global and CISA data, apparent steel consumption in May 2025 dropped by 12.3% year-on-year to 75.57 million tons. From January to May, demand fell 3.9% y/y to 374.81 million tons, with average daily consumption declining to 2.438 million tons.
Despite weakening demand, steel mills have yet to curb output, supported by rising export volumes and declining raw material prices that improve margins. Exports surged during the first half of 2025, driven in part by U.S. tariff policies that incentivized Chinese suppliers to seek overseas buyers. This trend is expected to keep exports strong through year-end but may later affect steel-intensive product shipments.
Domestic demand, especially from the construction sector, softened further in June due to seasonal factors, and its typical rebound in late summer may be muted. Meanwhile, CISA has urged producers to align output with actual demand and maintain price discipline. Although steel production fell by 6.9% y/y in May to 86.55 million tons, the rebound in June indicates persistent supply-side pressure as the market braces for a challenging summer
