China reduced steel production by 1.7% y/y in 2024

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 five years, Reuters reports, citing data from the National Bureau of Statistics of China.

Experts note that 2024 is likely to be the last year when steel production in China exceeded 1 billion tons. Analysts predict that in 2025, production will fall below this level. The decline in production is due to the ongoing real estate crisis, which has a significant impact on steel demand.

China’s steel production peaked in 2020, when it reached 1.065 billion tons. Since then, the industry has been in decline. Demand for steel has declined due to the downturn in the real estate sector as well as government restrictions on production growth to reduce carbon emissions. In 2024, steel consumption fell by 4.4%, according to the China Metallurgical Industry Planning and Research Institute.

However, the decline in demand in the construction sector was partially offset by growth in the manufacturing sector, which received significant support from government incentives. In addition, China has been actively increasing steel exports. In 2024, exports reached 110.72 million tons, the highest level since 2015. This has caused concern among competing countries such as Japan and India, where producers complain about low prices of Chinese products affecting local markets.

Despite the overall decline, in December 2024, production increased by 11.8% compared to the same period in 2023, reaching 75.97 million tons. At the same time, the figure fell by 3.1% compared to the previous month. Analysts predict that the rate of decline in demand will slow in 2025 if the government introduces new incentives to support the economy.

“Steel consumption is in a downward cycle, but we expect the rate of decline to slow due to possible new economic stimulus,” said Zhou Guiqiu, an analyst at Jinrui Futures.

As GMK Center reported earlier, China produced 1.019 billion tons of steel in 2023, up 0.6% from 2022. Thus, the downward trend in the country’s steel industry has stopped after two consecutive years of declining production.

In 2023, the Chinese authorities did not impose restrictions on steel production in line with their ambitions to reduce CO2 emissions, which contributed to an increase in production and revenue of local steelmakers.

China’s steel exports in 2023 increased by 36.2% y/y – to 90.3 million tons. Steel imports amounted to 7.64 million tons, down 27.6% y/y. Ore imports for the year increased by 6.6% y/y – to 1.179 billion tons.