by XIAO Yifan
China's crude steel output fell again in 2025, slipping below 1 billion tonnes for the first time since peaking in 2020, as tighter policy controls and a prolonged property downturn weighed on production.
Data released by the National Bureau of Statistics on January 19 showed China produced about 961 million tonnes of crude steel in 2025, down 4.4% from a year earlier. Output last fell below the 1 billion-tonne mark in 2019, before rising to a record 1.053 billion tonnes in 2020.
Since then, production has followed a broadly downward trend, interrupted only by a brief stabilization in 2023. Between 2020 and 2025, cumulative crude steel output fell by 92.19 million tonnes, according to official data.
The drop came as tighter supply controls coincided with a prolonged slowdown in construction demand.
The industry has remained under controls that cap both steelmaking capacity and output, introduced as part of China's carbon-reduction drive. Since carbon neutrality goals were set in 2020, steelmaking — one of the country's largest sources of emissions — has been a key focus, with outdated and high-polluting capacity gradually phased out.
In March, China's top economic planner said crude steel output controls would remain in place in 2025, alongside efforts to push industry consolidation and cut excess capacity. The policy stance hardened in mid-year, with official calls to curb disorderly low-price competition and accelerate the exit of outdated capacity. Further guidance followed in September, when industry regulators reaffirmed output controls and banned new capacity additions for 2025-2026.
At the same time, demand from downstream sectors has continued to weaken, led by a sharp contraction in construction steel as the property downturn deepened. According to Mysteel, transactions in construction steel fell 19.37% in 2024 and declined a further 18.14% in the first seven months of 2025. Construction steel once accounted for more than half of total steel consumption.
Manufacturing demand has risen but has not been enough to offset the decline. Data from the China Iron and Steel Association showed manufacturing's share of steel consumption increased from 42% in 2020 to 50% in 2024.
Even so, apparent steel consumption fell 5.3% in 2024 and dropped a further 6.4% year on year in the January-October period of 2025 to 710 million tonnes.
Exports have absorbed part of the excess supply. Customs data showed China exported 108 million tonnes of steel in the first 11 months of 2025, up 6.7% from a year earlier.
That outlet is likely to narrow. In December, the Ministry of Commerce and customs authorities said selected steel products would be subject to export licensing from January 1, 2026. At the same time, the European Union's carbon border adjustment mechanism is set to enter its full implementation phase next year, adding to cost pressures for steel exporters.
With policy constraints tightening, domestic demand weakening and external headwinds rising, analysts say China's steel industry faces growing pressure to accelerate its shift toward greener production and higher-value products.
