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| China steel production |
Production Cuts Driven by Weak Domestic Demand
China steel production declined to 72 million tons in October 2025, down 12% year-on-year. Weak consumption in real estate and industrial sectors is pressuring mills. Excess capacity and low profit margins prevent price recovery. Government guidance encourages production discipline, further limiting output. Consequently, January–October cumulative production fell 4% to 818 million tons, signaling persistent structural challenges.
Market Reactions and Commodity Impacts
Steel futures and raw materials reflected weak demand expectations. Rebar futures dropped 0.2% on the Shanghai Exchange. Hot-rolled coil prices fell, while Singapore iron ore futures declined 0.6% to $102.2/t. Analysts highlight that oversupply and slowing domestic consumption continue to suppress market optimism. Meanwhile, production reduction strategies remain key for balancing supply-demand dynamics.
Long-Term Trends in Chinese Steel Output
In 2024, Chinese steel companies produced 1.005 billion tons, marking the lowest figure in the last five years. Experts anticipate ongoing production restraint as structural demand issues persist. In the near term, China steel production may continue to contract amid real estate weakness and industrial slowdown. Therefore, domestic mills are adjusting operations cautiously to stabilize margins.
ScrapInsight Commentary
China steel production cuts highlight structural oversupply and weakening domestic demand. Prices are unlikely to recover quickly, while raw material markets remain under pressure. Strategic production discipline may support long-term market stabilization.
