Posted on 23 Sep 2025
China has issued a two-year action plan for its steel sector, setting an average annual growth target of around 4% in industrial added value for 2025-2026. The blueprint, released on September 22 by five government ministries including the Ministry of Industry and Information Technology (MIIT), aims to restore the steel sector's profitability, balance steel market supply and demand, optimize industry structure, and accelerate the sector's green and digital transformation.
The action plan notes that to tackle overcapacity and sluggish demand, the steel sector will strictly prohibit new capacity, enforce production cuts, and encourage higher-quality output. It also supports technologies such as hydrogen metallurgy, electric furnaces, and specialty steel, while promoting industry consolidation. Inefficient steel plants will be phased out through stricter capacity replacement rules and annual production limits.
The plan calls for stronger innovation and product upgrades, urging steel producers to expand the supply of high-performance materials such as bearing steel, gear steel, and high-temperature alloys. Meanwhile, product standards in key downstream sectors including automotive, machinery, and appliances will be raised.
Equipment renewal is another priority of the plan. Outdated blast furnaces, converters, coke ovens and sintering machines will be phased out, while advanced electric furnaces and specialized smelting technologies are promoted. Steel producers in regions with favorable conditions are encouraged to shift from the traditional blast furnace-converter steelmaking process to the electric-furnace route.
Securing steelmaking raw materials is also emphasized. The plan calls for accelerating China's domestic iron ore and coal development, supporting long-term supply contracts, and expanding scrap recycling through integrated collection and processing hubs.
On the environmental front, the steel sector is mandated to complete ultra-low emission upgrades by the end of 2025. The plan encourages wider adoption of clean energy and carbon-reduction technologies, alongside digital initiatives such as AI applications, smart equipment retrofits, and carbon footprint tracking systems.
Internationally, China aims to optimize its steel export structure, align product standards and carbon accounting with global norms, and deepen cooperation with Belt and Road Initiative partners.
Source:Mysteel Global
