China reduced steel production by 6.9% y/y in May

According to data from the National Bureau of Statistics of China, Chinese steel companies reduced steel production by 6.9% in May 2025 compared to May 2024, to 86.55 million tons, Reuters reports.

This is the second consecutive monthly decline in production after an unexpected drop in April. Although the government announced plans to restructure the steel sector back in March, specific terms and volumes of the reduction have not yet been disclosed.

In the first five months of 2025, steel production in the country decreased by 1.7% year-on-year – to 431.63 million tons.

The decline in performance comes amid relatively positive financial dynamics in the industry. According to the analytical company Mysteel, more than 50% of Chinese steel producers made a profit in January-May, compared to 35% in the same period of 2024.

Export activity also remains high despite global trade barriers – growth of 8.9% y/y – to 48.47 million tons in January-May was a record high for this period in the country’s history.

Despite the positive financial background, daily production rates continue to decline. In May, the average daily volume was 2.79 million tons, which is 2.6% less than in April (2.87 million tons).

According to the forecast of the China Iron and Steel Association (CISA), steel production in China will decline by 4% y/y in 2025. This is in line with Beijing’s policy of trying to reduce the economy’s dependence on heavy industry and solve the problem of excess production capacity.

As GMK Center reported earlier, Chinese steel 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.