China reduced steel production by 1.5% y/y in January-February

The indicator declined despite an increase in steelmakers' profits and exports of finished products

In January-February 2025, China’s steel industry reduced steel production by 1.5% compared to the same period in 2024, to 166.3 million tons. This is evidenced by the data of the National Bureau of Statistics of China (NBS), Reuters reports.

The decline in production contradicted the expectations of some analysts who predicted growth, citing higher exports. In particular, steel shipments in the first two months increased by 6.7% y/y – to 16.97 million tons. This is partly due to the fact that producers were in a hurry to export products due to the risk of a global trade war after US President Donald Trump came to power in January.

The total production in January-February corresponds to an average daily output of 2.82 million tons, which is 0.7% more than 2.8 million tons in the same period last year. This is also higher than in December, when it was 2.45 million tons per day.

According to the WorldSteel Association, in January of this year, steel production in China amounted to 81.9 million tons, down 5.6% y/y. Thus, in February, 84.4 million tons were produced.

Steel production in the country is expected to grow in March as steel mills increase production due to higher profits, analysts say. According to Mysteel, at the end of February, about half of the steelmakers in its weekly survey were operating at a profit, while in the same period in 2024, this figure was only about 20%.

Analysts also note that some mills are trying to attract more orders as the global trade war creates uncertainty about demand in the coming months, which threatens steel prices.

As GMK Center reported earlier, China’s steelmaking companies reduced steel production by 1.7% year-on-year in 2024, producing 1.005 billion tons. This is the lowest figure in the last five years.

Experts note that 2024 is likely to be the last year when steel production in China exceeded 1 billion tons. In particular, in March, the country’s authorities announced plans to cut steel production as part of the restructuring of the steel industry.