China to Cut Steel Production by at Least 25 Million Tons in 2025

China’s Steel Production Cut Targets and Industry Stabilization

China’s government announced plans to cut steel production by at least 25 million tons in 2025. Authorities aim to reduce output to below 980 million tons, down from 1.005 billion tons in 2024. This move reflects efforts to stabilize the steel industry amid environmental concerns and market fluctuations. Several ministries, including Industry and Information Technology, Natural Resources, and Ecology and Environment, will oversee these measures.

The policy focuses on “precise regulation” of steel capacity and closing obsolete equipment. Instead of strict production caps, China will classify steel plants based on efficiency and environmental compliance. This “categorized management” approach intends to support advanced, high-tech steelmaking processes. Authorities expect metallurgy’s added value to grow about 4% annually during 2025-2026.

Impact of Steel Production Cuts on China’s Market and Global Supply

Steel production in China already dropped by 3.1% in the first seven months of 2025, falling by 19 million tons year-on-year. Factory representatives note the decline has slowed compared to earlier forecasts that predicted a 50 million-ton reduction. Despite this, the government’s approach aims to balance production cuts with economic growth targets.

The Chinese Iron and Steel Association urged companies to self-regulate production and stabilize steel prices. By managing supply and encouraging cleaner technologies, China plans to improve the steel sector’s sustainability. These production cuts may tighten global steel supply, impacting commodity prices and international trade flows.

SuperMetalPrice Commentary:

China’s planned steel production cut highlights its dual focus on environmental stewardship and industrial modernization. The “categorized management” strategy will likely accelerate the retirement of inefficient plants while boosting innovation. As China dominates global steel output, these changes will influence global prices and supply chains. Market participants should monitor policy developments closely, as China’s steel adjustments may create ripple effects in metal markets worldwide.