China is experiencing a clear divergence between the reduction in steel output and the active growth in iron ore imports, indicating possible structural changes in the country’s metallurgy market.
This is reported by Finway
Steel Production Declines Despite Stable Raw Material Supply
China, which remains the world’s largest steel producer, produced 86.63 million tons of this metal in April 2026. This figure is 2.8% lower than last year and is the lowest since April 2018. From January to April, production reached 331.12 million tons, which is 4.1% less than the corresponding period in 2025.
Despite the noticeable decrease in production, iron ore imports to China, on the contrary, increased by 8% and amounted to 418.6 million tons in the first four months of 2026. In April, the country purchased 103.9 million tons of iron ore, which is only 0.8% less than the March volume of 104.74 million tons. At the same time, when considering the number of days in the month, the average daily import of ore even increased. DBX Commodities experts predict that in May, China may import about 104.67 million tons of this raw material.
“Weak steel production is linked to a prolonged downturn in the construction sector and a reduction in exports. In April, steel shipments abroad fell by 9% year-on-year to 9.5 million tons,” the report states.
Influencing Factors: Stocks, Geopolitics, and Market Structure
In the first four months of 2026, steel exports from China decreased by 9.7% to 34.2 million tons. The active import of iron ore is explained by both short-term and long-term factors.
Among the temporary factors is the replenishment of stocks: according to SteelHome, the volumes of iron ore at Chinese port warehouses remain near historical highs. Typically, stocks increase at the end of the year and decrease in spring when the construction season begins. Since July 2025, when stocks reached a minimum of 131.05 million tons, they have increased by approximately 22%.
The market is currently waiting to see whether seasonal trends will persist and whether stocks will begin to decrease ahead of the summer demand increase, or if the consistently low level of steel production will contribute to maintaining high ore stocks at the ports.
The increase in imports may also have been influenced by geopolitical factors: the war in Iran and the threat of fuel supply disruptions due to the effective blockade of the Strait of Hormuz have prompted Chinese metallurgical companies and traders to actively procure raw materials in anticipation of possible future disruptions.
At the same time, domestic iron ore production decreased by 1% and amounted to 326.8 million tons in the first four months of 2026. If the trend of declining domestic production continues, the share of imports in the Chinese market may further increase if overall demand for steel remains stable.