China’s steel industry is facing external pressures such as changing tariffs.
During Baosteel’s first-quarter results briefing, deputy general manager Cai Yanbo addressed speculation about a possible 50 million tonne reduction in China’s crude steel production: “Chances for a cut are high as it has been mentioned in the government report.” However, he cautioned against abrupt measures, stating: “We have appealed to relevant authorities to avoid [a] one-size-fits-all approach while controlling output.” A reduction in output could stabilize the steel market, potentially supporting prices and affecting the cost of steelmaking materials. Details on the timing and scale of any cuts remain unspecified.
Baosteel’s chair, Zou Jinxin, provided insights into the company’s export outlook, forecasting a decline of approximately 15 million tonnes in steel exports for 2025 due to rising tariffs. He also projected a 20 million tonne decrease in indirect steel exports, which include manufactured goods like containers and vehicles. Jinxin anticipated additional government measures to address these economic challenges. Additionally, he noted an expected 2% decline in domestic steel consumption for 2025.
In 2024, China’s steel exports reached a nine-year high of 110.72 million tonnes, with Baosteel achieving a record 6.07 million tonnes in exports. The company has not yet announced its export target for 2025. Despite market challenges, Baosteel reported a 26.4% increase in first-quarter net profit this year, driven by lower operational costs.
Last month, Marula Mining’s subsidiary, Muchai Mining Kenya, signed an agreement with Baosteel Resources South Africa for the sale and purchase of manganese ore from the Kilifi manganese processing plant in Kenya. This partnership reflects Baosteel’s efforts to secure raw materials to support its operations.
Baosteel’s outlook underscores the complexities facing China’s steel industry, including balancing production capacity with market demand and navigating global trade dynamics. The company’s focus on cost efficiencies and strategic partnerships, combined with potential government support, aims to strengthen its position in a competitive market. As plans to restructure the steel sector progress, Baosteel continues to adapt to evolving economic conditions while maintaining its leadership in global steel production.
