Posted on 30 Apr 2025
Baoshan Iron & Steel Co., Ltd. (Baosteel), the listed subsidiary of the world's largest steelmaker, China Baowu Steel Group, emphasized the need for rational production control within China's steel industry in light of mounting challenges in key downstream sectors. The statement was made during the company's first-quarter results briefing on Monday.
Baosteel pointed to significant difficulties faced by downstream steel-consuming industries --including automotive, home appliances, and machinery -- exacerbated by ongoing U.S. tariffs. In response, the company underscored the importance of aligning with national policy directives to ensure industry stability and sustainable development.
The company highlighted that the Chinese government has reiterated its commitment to "continuing to implement crude steel production regulation this year," as outlined in the Government Work Report released in the top political meetings "Two Sessions" in early March, though the specific control measures have yet to be detailed in forthcoming official policy documents.
While pledging full compliance with all relevant regulations, Baosteel stated that it would continue to pursue full-capacity production and maximize sales volumes this year.
With multiple production bases strategically located across China, the company said it is well-positioned to respond flexibly to production restrictions through optimized allocation of manufacturing resources.
Baosteel also noted the official inclusion of the steel sector in China's national carbon emissions trading market and welcomed the release of the Normative Conditions for the Steel Industry (2025).
These measures, Baosteel believes, are likely to enhance self-regulation across the industry, consolidate resources among more competitive players, and modernize the management model of Chinese steel producers.
The company advocated for intensified focus on key areas such as ultra-low emissions upgrades, energy efficiency benchmarks, and carbon emissions performance. It called for a reward-and-penalty mechanism -- wherein high-performing steel companies are incentivized, while underperforming producers are held accountable.
While a "one-size-fits-all" approach may yield quick results in the short term, Baosteel noted that it could, over time, lead to the unintended consequence of favoring less competitive players over stronger ones -- ultimately hindering the steel industry's transition toward high-quality development.
In terms of operational performance, Baosteel reported production of 11.55 million tonnes of hot metal in the first quarter of 2025, against a full-year target of 48.79 million tonnes. Crude steel output for the January-March period stood at 12.23 million tonnes, with the company aiming to produce 52.61 million tonnes over the full year, Mysteel Global learned from Baosteel's Q1 2025 results and 2024 annual report.
Source:Mysteel Global
