In January-February 2026, China reduced its steel production by 3.6%, totaling 160.3 million tons. This indicates a continuation of the trend of decreasing metal output compared to the same period last year.
This is reported by Finway
Reasons for the Decrease in Steel Production
Chinese metallurgical enterprises are forced to limit production in response to a prolonged decline in demand. According to Stephen Yu, an analyst at the consulting firm Mysteel, the early months of the year are traditionally quieter for the steel industry due to the celebration of the Lunar New Year. Additionally, ahead of the annual meetings of legislative bodies in Beijing in early March, environmental protection measures are intensified, which also affects production volumes.
“This year, industry enterprises are less inclined to accumulate inventory in anticipation of an active spring season due to increasing uncertainty regarding economic prospects,” noted Stephen Yu.
Impact of Economic and Structural Factors
In recent years, China’s economy has shown signs of maturity, accompanied by a reduction in construction volumes. This leads to structural slowing in the steel industry, further exacerbated by a prolonged crisis in the real estate market. At the same time, exports of products are decreasing due to the introduction of stricter licensing regulations.
In 2025, steel production in China fell below 1 billion tons for the first time since 2019. However, the accuracy of official statistics, as experts note, raises certain doubts. The Chinese government continues to exert pressure on the industry, demanding a reduction in production capacities and stricter requirements for the construction of new plants. Despite this, the authorities have not yet dared to implement significant supply reductions that could stabilize the steel market.