Posted on 28 May 2025
Chinese state subsidies for steel producers are significantly distorting the global market and undermining investments aimed at reducing carbon emissions, according to a report released on Tuesday by the Organisation for Economic Cooperation and Development (OECD).
China remains the world’s top steel manufacturer, producing over a billion tonnes in 2024. However, declining domestic demand—especially due to a downturn in the country’s property sector—has prompted Chinese firms to ramp up exports to overseas markets.
The OECD’s Steel Outlook 2025 report highlighted that the international steel trade is increasingly influenced by non-market dynamics, giving Chinese producers an unfair advantage. “China’s rate of steel subsidisation, as a share of company revenues, is five times higher than the average in other economies,” the OECD noted. This has helped Chinese steel exports more than double since 2020.
This year, Chinese steel exports soared to a record 118 million tonnes, while imports into China plunged nearly 80 percent to just 8.7 million tonnes. The shift, the OECD warned, is placing immense pressure on global steelmakers as their own exports decline and they face an influx of cheaper imports.
In the past four years, countries across the globe have witnessed a sharp rise in steel imports: up 13 percent in the EU and UK, 18 percent in Japan and South Korea, 40 percent in North America, 52 percent in Turkey, 60 percent in South America, and 77 percent in Oceania.
The impact of China’s steel overcapacity is also rippling through emerging markets such as North Africa, the Middle East, and Southeast Asia. These regions, already grappling with their own steel oversupply, are exporting more to developed economies as their domestic markets become saturated.
This glut of steel has triggered a surge in trade defence measures. In 2024 alone, 81 anti-dumping investigations into steel products were launched by 19 governments — a fivefold increase from the previous year. Nearly 80 percent of those cases targeted Asian exporters, with China accounting for over a third.
The issue has fuelled protectionist responses. Earlier this year, US President Donald Trump imposed a 25 percent tariff on all imported steel. In the UK, emergency legislation was passed in April to nationalise the country’s last remaining blast furnaces after Chinese-owned British Steel threatened closure, declaring its British operations financially unsustainable.
The OECD further warned that the availability of cut-price steel is damaging long-term climate goals, as the steel sector contributes around eight percent of total global carbon dioxide emissions. The current market distortion makes it harder for producers to invest in greener technologies.
The report concluded with a call for international collaboration to address the surplus and restore fairness in the industry. “Steelmakers cannot achieve sustained profitability until global overcapacity and its fallout are properly tackled,” the OECD stated. “Global cooperation is essential to ensure a level playing field in the steel market.”
Source:News Central TV
