China: Crude steel production decreases by 4% y-o-y in Jul’25

• Crude steel production hits 7-month low
• Govt advocates for supply-side reforms

China’s crude steel production in July 2025 stood at 79.66 million tonnes (mnt), down 4% y-o-y to a seven-month low, according to data from the National Bureau of Statistics (NBS). Moreover, average daily crude steel output was 2.569 mnt, reflecting a 7.4% m-o-m decline.

Crude steel production in January-July 2025 totalled 594.47 mnt, registering a 3.1% drop y-o-y against the same period last year.

Factors affecting output

Chinese govt calls for supply-side reforms: Notably, the decline in output comes amid the Chinese administration’s recent calls for disciplined production, aiming to tackle persistent oversupply and low-priced competition. With demand remaining lacklustre, steel overcapacity has led to aggressive price undercutting, which has been detrimental to industry growth. This “anti-involution” movement, referring to measures to address intense and often destructive competition, is expected to have led to lower production.

Steel demand softens amid weather disruptions: China’s steel output declined with weaker demand from the struggling property sector and a weather-driven slowdown in end-user segments such as construction. July 2025 was marked by heatwaves and heavy rainfall, which disrupted construction activity.

China’s steel exports surge in Jul’25

Parallelly, even though China’s steel production fell, its exports grew strongly in July 2025. Shipments rose 25.7% y-o-y to 9.836 mnt, from 7.82 mnt last July, and were also 1.6% higher than in June.

From January-July 2025, exports totalled 67.983 mnt, up 11.4% y-o-y. This surge comes despite global pushback, with nearly 40 countries launching anti-dumping probes. Vietnam and South Korea have already imposed tariffs, saying cheap Chinese steel is hurting their local industries.

Outlook

In the near term, production is likely to stay subdued, especially given that the government has ordered mills in Tangshan, China’s largest steel production hub, to halt operations over 25 August-3 September to ensure clean air ahead of a military parade in Beijing. Output is also likely to stay under pressure amid weak domestic demand, property sector stress, and seasonal disruptions.

Meanwhile, export strength is expected to support market balance, though rising protectionist measures could weigh on future overseas demand.