China’s Steel Production Drops 1.5% in Early 2025

China's steel industry saw a 1.5% year-on-year decline in production during January-February 2025, totaling 166.3 million tons, according to data from the National Bureau of Statistics of China (NBS), as reported by Reuters.

This decrease defied analysts' expectations of growth, which were based on increasing exports. In fact, steel shipments rose 6.7% year-on-year in the first two months, reaching 16.97 million tons. The surge in exports was partly driven by concerns over a potential global trade war following the inauguration of U.S. President Donald Trump in January, prompting manufacturers to expedite shipments.

Despite the annual decline, average daily steel output in January-February stood at 2.82 million tons, marking a 0.7% increase from 2.8 million tons during the same period in 2024. This output also surpassed December 2024's daily production of 2.45 million tons.

According to the World Steel Association, January 2025 production in China was 81.9 million tons, reflecting a 5.6% year-on-year drop. This means that February's production reached approximately 84.4 million tons.

Looking ahead, analysts expect steel output to rise in March as mills ramp up production in response to higher profit margins. A Mysteel survey indicated that by the end of February, about 50% of steelmakers were operating profitably—significantly higher than the 20% recorded in February 2024.

However, concerns persist regarding the impact of a potential global trade war on future demand, which could destabilize steel prices. As a result, some mills are pushing for more orders to mitigate risks.

In 2024, China's steel production declined by 1.7% year-on-year, totaling 1.005 billion tons—the lowest level in five years. Experts believe that 2024 may have been the last year China’s steel output exceeded 1 billion tons, as the government has announced plans to further cut production as part of an industry restructuring effort.