Steel production in China could fall by 1.2% у/y in 2026 — forecast

According to SteelHome’s latest forecast, steel production volumes in China will show a moderate decline in 2026 due to structural imbalances in the market. Steel output is expected to stand at 950 million tonnes, down 1.2% on the previous year.

Pig iron production will fall by 1.3% year-on-year – to 825 million tonnes, whilst rolled steel production will decline by 0.7% year-on-year – to 1.435 million tonnes. This is stated in a report by Stella Yang, Head of International Operations at SteelHome.

The quarterly breakdown and forecast for the second half of 2026 indicate a gradual stabilisation in production rates following a decline in the first half of the year. Despite the overall negative annual trend, a slight recovery in steel production volumes is forecast for the third and fourth quarters of 2026 on a year-on-year basis (+0.7% and +1.6% respectively) compared with the corresponding periods of the previous year.

Analysts highlight several key trends that will shape the sector’s dynamics:

1. A shift in the structure of demand. Steel consumption by the industrial sector will outpace that of the construction segment.
2. A precarious balance. The steel market will remain in a state of weak equilibrium against a backdrop of high supply elasticity.
3. Export trends. Volumes of finished rolled steel exports will remain substantial, though their growth rates will be limited. At the same time, a sharp increase in exports of steel billets is expected.

As reported by GMK Center, steel production in China in the first quarter of 2026 fell by 4.6% year-on-year – to 247.5 million tonnes. The downward trend intensified in March, when output fell by 6.3% year-on-year – to 87.04 million tonnes, the lowest figure for that month since 2020. Average daily production stood at 2.81 million tonnes, compared with 2.99 million tonnes a year earlier.