China’s crude steel production and steel consumption have both declined as the country’s real estate market continues to trend downward and large-scale infrastructure construction slows. Industry insiders predict that China’s steel exports may decrease by half over the next five years.
Since the beginning of this year, China’s crude steel production and apparent steel consumption have been on a downward trajectory. According to a report by the China Securities Journal on Tuesday, from January to October, China’s cumulative crude steel production totaled 818 million tons, representing a 3.9% year-on-year decrease. The latest data from the China Iron and Steel Association (referred to as “CISA”) shows that in the first three quarters of 2025, domestic apparent steel consumption was 649 million tons, marking a 5.7% year-on-year decline.
Spokesperson Jiang Wei of CISA stated at a press conference in October that the situation of supply and demand imbalance has become very severe. The decline in production and sales in the steel industry is a reflection of larger transformation happening in China’s economic model. The era of China’s economy largely driven by steel is coming to an end as the peak of the real estate boom has passed and significant infrastructure construction expenditure slows down.
Since the start of the 14th Five-Year Plan, China’s apparent steel consumption has continued to decline. Domestic apparent consumption has dropped from its peak of 1.04 billion tons in 2020 to 890 million tons in 2024, a decrease of 150 million tons, averaging a 3.8% annual decline.
Apparent steel consumption is an indicator of a country or region’s overall demand for steel over a certain period, calculated by domestic production + imports – exports.
Moreover, in October, profitability of Chinese steel enterprises deteriorated once again. Data released by the National Bureau of Statistics of China indicated that the steel industry’s profit in October was 7.98 billion yuan (approximately 960 million US dollars), a decrease of 5.66 billion yuan (a 41% decrease) from the previous month and a 25.9% year-on-year decrease, with a profit margin of only 1.2%.
However, according to CISA statistics, the total profit of the steel industry in the first three quarters of 2025 reached 96 billion yuan (approximately 13.52 billion US dollars), a nearly 190% year-on-year increase. The sales profit margin rose to 2.1%, reversing the previous loss-making trend in the past few years.
An analysis by Caixin Online recently pointed out that although prices of rebar and hot-rolled coil fell by 7% to 9% in the first half of 2025, the coking coal price index plummeted by 31.5%, while prices of low-sulfur high-quality coking coal dropped by 19.7%, and iron ore prices fell by 7.3% to about 93.55 US dollars per dry metric ton, leading to significant profit growth for steel enterprises.
However, this upward trend may only be temporary as coking coal prices surged by around 10% in October. Analyst Zhang Kaidong from the industry data provider “My Steel” warned, “The decline in coal prices will not continue indefinitely.” If input costs continue to rise, many steel mills may once again face the brink of losses.
In the first three quarters of this year, China’s steel exports increased by 9.2%, reaching 87.96 million tons, but the future outlook for exports appears highly challenging.
An article on Caixin Online reported that Chen Hongbing, President of the Jiangsu Iron and Steel Association, stated that over the next five years, China’s direct steel exports may decrease by half. This would potentially reduce China’s apparent steel consumption from the current over 1 billion tons to around 750 million tons, reshaping not only the industry but also shaking the foundation of China’s economy post-reform and opening-up.
On July 7th, the Vietnamese Ministry of Industry and Trade officially imposed anti-dumping duties ranging from 23.1% to 27.83% on Chinese hot-rolled steel coils. On October 27th, the Vietnamese Ministry of Industry and Trade announced the initiation of an anti-circumvention investigation on hot-rolled plate coils originating from China.
Vietnam is China’s largest overseas steel market; however, Chinese customs data for the first three quarters of 2025 indicated a steep decline of 24.8% in China’s steel exports to Vietnam.
Vietnam is not the only country taking retaliatory measures. From early 2024 to August of this year, at least eleven countries have implemented anti-dumping or safeguard measures on various Chinese steel products. According to statistics from the Chinese Ministry of Commerce, China’s steel exports in relevant markets dropped by nearly 30% in the first seven months of 2025.