- Crude steel output drops 9% y-o-y in Jun’25
- Exports lift some pressure off domestic market
China’s crude steel output dropped around 3% year-on-year (y-o-y) to 514.83 million tonnes (mnt) in the January to July (H1) of calendar year (CY) 2025, as per the latest data released by the National Bureau of Statistics (NBS). Last year it had stood around 528.14 mnt.
For June 2025 alone, crude steel output reached 83.18 million tons, reflecting a notable 9% y-o-y drop compared to 91.61 mnt in the same month last year. In May 2025, the production volume stood at around 86.55 mnt.
On a monthly basis, June’s average daily crude steel production stood at 2.773 mnt, down by 0.7% compared to the previous month.
The country’s pig iron output declined by 0.8% to 434.68 mnt in H1 CY2025.. Production in June dropped by 4.1% y-o-y to 71.91 million tons. However, average daily pig iron production in June increased slightly by 0.3% over the previous month to 2.397 million tons.
China’s steel output reached 734.38 mnt in H1 CY2025, reflecting a 4.6% increase over the same period last year. June alone saw a steel output of 127.84 million tons, up 1.8% y-o-y. On a monthly comparison, average daily steel production in June was 4.261 million tons, representing a 3.6% increase.
Market sentiment and contributing factors
Lacklustre domestic market demand:
The contraction in crude steel and pig iron output stems from persistently weak domestic demand, particularly due to the prolonged downturn in China’s property sector, which historically accounts for a significant share of steel consumption. Real estate investment and new construction starts have declined sharply, compelling many mills, especially small and medium-sized ones, to cut back production. In response, industry restructuring, government-imposed capacity controls, and the national drive for ultra-low emissions added further to the restraining factors.
Reliance on exports and global pressures:
Chinese steel mills were able to ramp up exports to offset domestic shortfalls, despite subdued local demand. China’s steel exports rose nearly 9.2% y-o-y to 58.147 mnt in H1 CY2025 compared to 53.38 mnt in the corresponding period last year. Export growth has been powered chiefly by the sales of finished products of the manufacturing sector, filling the void left by weaker construction sector demand. However, this strategy faces mounting global headwinds, including rising trade barriers from the US and EU, and widespread sluggishness in international steel demand around increasing capacities in the Southeast Asian markets, especially Vietnam and India. The latter have been among the major importers of Chinese steel in the past.
Outlook
China’s crude steel production is likely to stay under pressure and might not show a major increase in the near term amid continued property sector challenges and tight environmental controls as winter sets in. While exports will provide critical support, external demand uncertainty and mounting trade restrictions may restrain further expansion in global trade.
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