China’s excess capacity problem has no quick fix – WorldSteel

The problem of China’s excess steel capacity will not be easy to overcome, as the industry is closely linked to the country’s economy as a whole. This opinion was expressed by Edwin Basson, CEO of the WorldSteel Association, in an interview with Bloomberg.

In his view, there is currently no short-term practical solution to the issue.

The Chinese steel industry is struggling with excess capacity after years of rapid growth driven by demand that no longer exists. Surplus production is being pushed onto world markets at low prices. This puts pressure on producers in other countries, exacerbating trade tensions.

By imposing import tariffs, the Trump administration focused on steel as one of its first steps, and many other countries have imposed anti-dumping duties on Chinese steel products.

As Basson noted, trade barriers are undoing two decades of relative openness in the global steel business.

“This open market that we enjoyed from 2000 to about 2020 is disappearing. The ability of materials to move between continents is an important issue for the industry,” he stressed.

WorldSteel expects steel demand in China to fall by 2% in 2025 and another 1% in 2026, continuing the decline that has forced Chinese producers to ship huge volumes abroad. According to trade data, steel exports from the country are expected to reach a record high this year, with volumes already exceeding 100 million tons in 11 months.

As GMK Center reported earlier, China reduced steel production to a four-year low in October. Production volumes amounted to 72 million tons, falling for the fifth month in a row.