China plans to decrease production in the steel sector to control overcapacity and reshape the industry. However, the authorities did not give a clear figure on how much will be reduced. Market experts estimate that production could decrease by around 50 million tons. The move is in line with the country's goals to reduce carbon emissions. In recent years, steelmakers have turned to exports in the face of shrinking profit margins and weakening domestic demand, but this has exacerbated trade tensions around the world.
Last five years, China's crude steel production decreased by 1.7% to 1,005.1 billion tons in 2024. This was the lowest level in recent years. Although China decided to limit steel production in 2021, problems persist due to oversupply and low prices in the sector. Experts believe that this time the government is preparing for a more direct intervention. In particular, low-cost Chinese steel has made it difficult to compete in the global market, leading many countries to take protectionist measures.
South Korea and Vietnam imposed anti-dumping duties on some Chinese steel products in February to protect domestic producers. Given the growing international pressure and Beijing's carbon targets, it seems inevitable that China will impose stricter regulations on steel production. The move is aimed at controlling oversupply in the sector and making the industry more sustainable.
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