China Steel Production Falls to 9-Month Low in August 2025

China Steel Production Declines Amid Environmental Controls and Weak Demand

China’s steel production fell to a nine-month low in August 2025, totaling 77.37 million tons—a 0.7% year-on-year decline. This also marked a 2.9% drop from July levels. According to the National Bureau of Statistics and Reuters, this is the third straight monthly contraction in output, bringing the total from January to August to 671.81 million tons, down 2.8% compared to the same period in 2024.

Tangshan, China’s top steel-producing city, implemented temporary output curbs to reduce pollution ahead of a military parade in Beijing on September 3. These restrictions reduced blast furnace operations to their lowest levels in over a month. Additionally, several electric arc furnaces (EAFs) relying on scrap metal also slashed output due to ongoing losses.

Mysteel data shows average daily steel output dropped from 2.57 million tons in July to 2.5 million tons in August. Industry experts cited seasonal weakness in demand and falling steel prices as key drivers. Notably, rebar prices fell 4% in August, while construction activity remained sluggish due to a prolonged real estate downturn.

Steel Output Trends Signal Structural Shift in Chinese Market

China’s construction crisis continues to drag on steel demand. New construction project starts fell 19.5% year-on-year in August. At the same time, steel export volumes declined versus July, reflecting broader softness in both domestic and international markets. These trends have forced producers to reduce operations, especially those running cost-sensitive EAFs.

In 2024, China produced 1.005 billion tons of steel—a 1.7% drop from 2023 and the lowest annual figure in five years. Analysts now forecast that 2024 will be the last year China exceeds 1 billion tons in annual steel production, signaling a long-term shift in market dynamics. This may lead to tighter global supply and shifting pricing power.

Meanwhile, the cost of scrap metal remained stable in August, putting pressure on EAF producers as steel prices fell. Negative profitability has already prompted production cutbacks, and more may follow if demand does not improve in Q4.

SuperMetalPrice Commentary:

China’s 2025 steel production trajectory reflects both cyclical weakness and long-term structural change. The persistent contraction in monthly output underscores the dual impact of government-mandated environmental curbs and a sluggish construction sector. Steelmakers operating EAFs now face margin compression due to falling prices and flat input costs. Looking ahead, reduced Chinese output could support global steel prices, particularly if other producers maintain or raise capacity. However, the outlook hinges on China’s economic recovery and global demand from infrastructure, automotive, and industrial sectors.