China’s largest listed steelmaker, Baoshan Iron & Steel Co (Baosteel), has indicated that the nation’s steel production could see significant reductions this year due to mounting pressures from overcapacity and declining demand.
Baosteel, a subsidiary of state-owned China Baowu Steel Group—currently the world’s largest steel producer—made the announcement during its first-quarter earnings briefing on Monday. Deputy General Manager Cai Yanbo noted that the likelihood of an output cut was “high,” especially after it was mentioned in a recent government report.
The anticipated reduction of 50 million metric tons of crude steel production would help stabilize the steel market by supporting steel prices and alleviating the pressure on raw material costs. However, Cai tempered expectations, clarifying that the cuts were unlikely to occur immediately. “We have appealed to relevant authorities to avoid a one-size-fits-all approach in managing output,” he said, adding that any drastic measures would not be implemented in the coming months.
China’s government has been vocal about its plans to restructure the steel industry, with output reductions playing a central role. However, details regarding the exact scale and timing of these cuts remain unclear.
In addition to domestic challenges, Baosteel Chairman Zou Jinxin warned that China’s steel exports would fall by approximately 15 million tons in 2025, a decline attributed to rising tariffs. Furthermore, indirect steel exports, including items like containers, vehicles, and engineering machinery, would drop by an estimated 20 million tons.
Despite these challenges, Zou remains optimistic that Beijing will introduce additional stimulus measures to counter external market pressures. Steel exports from China reached a nine-year high of 110.72 million tons in 2024, and Baosteel alone exported a record 6.07 million tons last year. However, the company has yet to set a specific target for its 2025 export volume.
Domestically, Baosteel forecasts a 2% decrease in steel consumption this year, further highlighting the industry’s ongoing struggles. Despite these challenges, Baosteel reported a 26.4% increase in its net profit for the first quarter, driven by reduced costs.
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