Pressure on steel supplies to China remains despite falling production
Global crude steel production decreased by 2.1% in the first 10 months of 2025, but downward price pressures caused by excess production capacity persisted as Chinese exports continued to grow.
The latest worldsteel data shows that production among steel producers in 70 countries monitored by the association. it amounted to 1.52 billion tons. A slight decline will not help mitigate the effects of excess steelmaking capacity. In its report on steel production prospects for 2025, the OECD said excess capacity is projected to rise to 721 million tonnes by 2027 as production continues to exceed global demand. This would exceed the total steel production in the OECD countries by about 290 million tons.
- This article was first published in the November issue of the European Parliament's International Steel Review. The monthly report provides subscribers with information on steel prices, indexes, market commentary, and forecasts from key global steel markets in North America, Europe, and Asia. Contact the members of the European Parliament for detailed information on how to subscribe.
The output of the world's largest steel mill- China's output in October decreased by 12% year-on-year, reaching 72 million tons, which is the lowest monthly figure since December 2023. As a result of such indicators, production volumes decreased by 3.9% compared to the same period last year and amounted to 817.9 million tons, which is 53.9% of global production.
The decline in prices in China has not abated
Despite further declines, with total production in 2024 down 1.7% year-on-year to its lowest level in five years, lower production in China will do little to ease the downward pressure on prices exerted by cheap materials of Chinese origin.
Chinese steel exports, which reached a record high of 110.7 million tons last year, up 22.7% from 2023, grew another 6.6% year-on-year between January and October, reaching 97.7 million tons. Despite this increase, the decrease in the selling price means that export earnings decreased by 2.7% year-on-year, over a 10-month period, to USD68bn.
China's exports continue to grow during a period of declining domestic demand, maintaining pressure on global steel markets. While the country's automotive sector is showing solid growth, slow growth in the construction sector is holding back consumption. According to an analysis conducted by worldsteel, China's steel consumption declined by 2.0% in 2025. According to the forecast, a further decline is expected in 2026.