China’s steel exports climb new peak in CY’25 as domestic demand slump persists

• • Exports surge in Dec’25 before new licensing system takes effect

• • Real estate depression continues, investment slides 17% y-o-y

• • Major growth markets include Middle East, Africa, South America

Morning Brief: China’s steel exports reached a record high of 119 million tonnes (mnt) in CY’25, easily surpassing the earlier peak of 112 mnt in 2015. The steady rise in exports throughout the year overturned earlier expectations that rising protectionism worldwide and declining crude steel production domestically would eventually slow down shipments last year.

In CY’25, exports increased by 7% from around 111 mnt in CY’24, with December 2025 recording the highest monthly total of the year at 11.3 mnt, up 16.2% y-o-y. The year-end spike followed the government’s announcement of the revival of an export licensing system on 12 December, which would be effective from January 2026.

Under the new system, covering around 300 steel products, an export licence and a quality certificate will be required at the time of application, and vessels will only be permitted to enter ports after receiving official approval. This prompted a last-minute rush due to fears that stricter regulatory oversight would stall shipments.

Factors influencing China’s steel export growth in CY’25:

Persistent downtrend in domestic demand leads to supply glut: Throughout 2025, Chinese steelmakers struggled with muted demand, which pushed them to turn to overseas markets to offload surplus inventory.

Historically the largest consumer of Chinese steel, the real estate sector saw development investment plummet by 17.2% y-o-y in CY’25, with the crisis in its fifth year. Additionally, while infrastructure is often used as a counter-cyclical tool to boost the economy, investment in this sector dropped by 2.2%. Manufacturing investment grew by a minor 0.6%, suggesting inadequate support to steel demand. This is in stark contrast to the 9.2% growth recorded in CY’24.

Another factor pointing to lacklustre domestic demand for construction steel is the sharp increase in rebar and structural steel exports. Rebar exports increased by 42.4% to 19.15 mnt, and those of structural steel rose by 36.6% to 8.08 mnt, as per a Japan Metal Daily report. Similarly, wire rod exports also rose by 13.1% to 2.96 mnt, reaching the highest level since 2014.

Competitive pricing lures buyers: Sustained price undercutting by Chinese steel exporters was crucial in increasing market share in several countries. In fact, Chinese steel products’ competitive pricing drew in importers in emerging economies with rapidly growing infrastructure and consumer needs.

In CY’25, the total steel export value in dollars decreased by 1.3% y-o-y, while the average price was down 8.1%.

To illustrate, Chinese hot-rolled coil (HRC) export offers, FOB Rizhao, moved down by 12% to $460/t in CY’25. A persistent domestic supply glut pushed HRC exporters to continue reducing offers, especially given rising trade barriers.

China’s 2025 HRC price average was lower than Russia’s $463/t, Japan’s $470/t, South Korea’s $493/t, and India’s $492/t for the Middle East and Southeast Asia and $550/t for EU-bound shipments.

Commodity diversification helps bypass trade barriers: Strategic reorganisation of product mixes enabled Chinese steel exporters to capture demand, as well as circumvent rising protectionist measures. For example, anti-dumping duties on Chinese HRCs in Vietnam, South Korea, and elsewhere led to an 18% decrease in HRC exports to 24 mnt, as per Shanghai Metals Market data.

Similarly, exports of long steel products such as rebars and structural steel expanded significantly due to weak domestic demand.

Exporters also scaled up shipments of more value-added products such as coated and galvanised steel sheets and coils, whose volumes increased 16% y-o-y to 31 mnt.

Moreover, in CY’25, China’s semi-finished steel exports surged by 134% to 14.8 mnt, according to SteelOrbis data. Unlike finished plates or coils, China’s billets exports have not been subject to trade remedy measures, given that they serve as raw materials for local mills in importing countries.

Region-wise steel exports

The Middle East and Africa region emerged as the largest importer of Chinese steel in CY25, with total arrivals into the region increasing by 14% y-o-y to 37.6 mnt. Top importers in the region were Saudi Arabia (+17%) and the UAE (-1%).

Notably, in October, the UAE initiated an anti-dumping probe into imports of heavy steel sections from China, following a complaint by Emirates Steel.

Imports by Turkiye dropped 6% y-o-y, as an anti-dumping duty on Chinese HRC reduced inflows. However, a manifold surge in billet exports to Turkiye limited the overall drop.

Southeast Asia’s imports from China stood at 34.4 mnt in CY’25, inching up 2% y-o-y. Volumes to Vietnam fell 20% y-o-y due to an anti-dumping duty imposed on Chinese HRCs.

China’s exports to the South and Central America increased by 17% y-o-y to 15 mnt in CY’25. Brazil remained the top importer, though volumes fell 11% due to safeguard measures and a quota-based tariff system.

Exports to East Asia were down by 8% y-o-y at 12.5 mnt in CY’25. South Korea (-11%) and Taiwan (-41%) experienced sharp declines due to protectionist measures, while Japan remained relatively flat (-1%).

China’s exports to South Asia (mainly India and Pakistan) rose by 2% y-o-y to 7.08 mnt. A 29% increase in exports to Pakistan offset a 28% drop in shipments to India. A safeguard duty on flat steel imports from China led to the sharp reduction in Indian volumes.

Steel exports to the EU and CIS countries increased aggressively by 24% and 27%, respectively.

Outlook:

China’s steel exports may moderate in CY’26 due to a couple of factors: First, an improving demand-supply balance may not necessitate redirection of supply overseas. The downtrend in crude steel production is expected to continue in CY’26 as well, though at a slower pace. This is likely to moderate the supply pressure domestically.

Simultaneously, the decline in consumption may not be as severe this year, with demand from the automobile, shipbuilding, and home appliances sectors remaining robust. Steel consumption in these sectors is expected to balance out the drag from the depressed housing market.

Secondly, the export licensing system may help regulate outflows, though stricter checks may not translate into a marked curtailment. This is because authorities will likely want to balance regulatory control with the need to maintain export revenues and avoid economic disruptions. Additionally, exports of more value-added goods may be prioritised rather low-value products, such as billets, whose shipments increased rapidly last year.

Even if direct steel exports soften, indirect steel exports are expected to stay strong. Volumes are projected to rise 4-5% y-o-y to around 150 mnt in 2026, as per Mysteel, following a forecast increase of 7% to 143 mnt in 2025. Monetary easing and improving liquidity globally are expected to facilitate an improvement in consumer demand despite geopolitical headwinds.