Steel industry in China

The steel industry of the People's Republic of China, initially small and hindered by war, expanded rapidly following market reforms in 1978, eventually becoming the world's largest producer.

Despite this growth, the industry faced challenges with high debt, market volatility, and environmental pressures.

Rising exports from 2023-2024 led to global oversupply, price drops, and tariffs, prompting China to halt new steel mill approvals and encourage overseas investments.

China's central government has also worked to phase out unprofitable "zombie" companies while pushing for stricter environmental controls on steel production.

[2]: 67  Power plants, steel, mining, machinery, chemicals, and national defense were deemed high priorities.

[3]: 299 China underwent rapid economic industrialisation since Deng Xiaoping's market reforms which took place in 1978.

After ascension to the WTO China aggressively expanded production for export and the growing appetite of local manufacturing industries such as automotive vehicles, consumer electronics and building materials.

[4] During the 2007–2008 financial crisis, the Chinese steel mills won price reprieves as demand from their customers slowed.

Steel mills prefer long term pricing to hedge against cost and maintain raw material supply stability.

[22] In the context of lowered demand (see also 2015–16 Chinese stock market crash), in 2016 the Chinese state announced large scale closures and redundancies in heavy and primary industries, many of which were functioning as zombie companies, with 1.8 million redundancies (15% of workforce) in the coal and steel industries planned to take place by 2020.

[1]: 101 In December 2024, Chinese researchers developed an iron-making technology that speeds up steel production, according to a published paper in the peer-reviewed journal Nonferrous Metals.