In 2024, China reached a peak by exporting 110 million tonnes of steel. However, it is now dealing with falling demand, trade barriers, and a crisis of overcapacity. It is projected that exports will drop to 75 million tonnes over the next 6 to 8 quarters.
Weak domestic demand and shrinking exports have resulted in 50 million tonnes of excess capacity, which could rise to 250 million tonnes by 2035.
As the world moves towards green steel, China faces several significant challenges:
Industry fragmentation (200 companies and 360 plants)
Low average age of blast furnaces (12 years)
Insufficient renewable energy sources near industrial zones
With annual carbon emissions of 2.2 gigatonnes, China’s steel industry is one of the most carbon-intensive in the world. Yet, only 15% of global green steel projects are located in China.
Proposed Solutions to Overcome the Crisis:
Consolidating producers (target: top 10 companies to hold 60% market share by 2025)
Phasing out high-polluting plants
Replacing blast furnaces with Electric Arc Furnaces (EAF)
Setting a minimum carbon price of $60 per tonne
