Posted on 15 Jul 2025
Chinese steel companies reduced steel production by 9.2% in June 2025 compared to June 2024, to 83.2 million tons. Compared to the previous month, the figure fell by 3.9%. This is evidenced by data from the National Bureau of Statistics of the PRC, Bloomberg reports.
This is the third consecutive decline in monthly smelting volumes, as a result of which steel production in the first half of this year fell to its lowest level since 2020 – 514.8 million tons (-3% y/y).
The decline in volumes is due to several factors. First, the prolonged crisis in China’s real estate market has significantly reduced demand for steel in the construction sector, a key consumer of metal products. Second, the extremely hot weather this summer has hampered work on construction sites, further reducing consumption.
In recent weeks, the government has also focused on issues of overproduction and price competition, which have been driving deflationary pressure in the industrial sector for the third consecutive year. Beijing is increasingly calling for a crackdown on excess capacity, especially in the steel industry, which remains the largest in the world.
In addition, according to Chelsea Ye, an analyst at McCloskey by Opis, production restrictions have become part of the preparations for the military parade in Beijing in September. In particular, in the city of Tangshan, one of the main centers of steel production, the activity of enterprises has been temporarily reduced to improve air quality.
According to analysts, the current dynamics indicate that even without the formal restrictions announced by the government at the beginning of the year, China can maintain annual steel production at a stable level due to a natural decline in demand.
As GMK Center reported earlier, Chinese steel companies reduced steel production by 1.7% in 2024 compared to the previous year, producing 1.005 billion tons. This is the lowest figure in the last five years. Experts note that 2024 is likely to be the last year when steel production in China exceeded 1 billion tons.
Source:GMK Center
