China’s steel exports have surged this year even as domestic demand, especially from property developers, falters, while aluminium shipments have fallen due to stronger demand from manufacturing and energy sectors abroad. With China producing more than half of the world’s steel and aluminium, Beijing is trying to curb overcapacity through informal production ceilings that both industries appear likely to approach.
Steel production is informally capped at no more than the previous year’s 1.005 billion metric tons. After ten months of 2025, output stood at 817.87 million tons, making it likely that total 2025 production will dip below 1 billion tons for the first time since 2019. Weakness in the property construction market has subdued domestic steel demand, prompting mills to lean on exports to maintain utilization and profits.
Exports of steel products rose 6.7% year over year to 107.72 million tons in the first 11 months of 2025, according to customs data released on Monday. If December mirrors the year’s average, full-year exports could reach around 117 million tons, surpassing 2015’s record of 112.39 million tons.
Export activity remains economically rational for steel mills, given domestic prices hovering near five-year lows. Shanghai Futures Exchange rebar closed at 3,128 yuan per ton on Monday, with prices largely moving sideways since a June low of 3,012 yuan. Chinese steel remains competitively priced against international benchmarks; for instance, LME-referenced Turkish rebar traded near $560.50 per ton last week.
China has expanded steel shipments despite several countries imposing tariffs to shield their own producers. A notable share of Chinese steel goes to other Asian nations with limited local production, where cheaper Chinese steel often makes economic sense for buyers.
Aluminium, by contrast, is experiencing a slump. Refined aluminium and related products exported from China declined by 9.2% in the first 11 months of 2025, totaling 5.59 million tons. China’s aluminium production is expected to stay near the annual cap of 45 million tons, and growing demand from domestic manufacturing and energy sectors has reduced the metal available for export.
Tighter Chinese aluminium supply helped lift London aluminium prices to about $2,920 per ton on December 5, the highest since May 2022. The contract has jumped roughly 27% from a low around $2,300 in early April 2025. Higher prices have offered some relief to Western smelters, particularly in Europe and Australia, which have faced rising energy costs.
If Beijing keeps the 45 million-ton annual aluminium cap, tighter global markets could persist into 2026. The big question is whether China’s steel sector could follow aluminium’s path and tighten supply as well. Assuming a cap of 1 billion tons for annual steel output, the pace of domestic demand recovery will be crucial. If construction remains a drag, steel mills may continue exporting to maintain profitability or retire aging furnaces to pare capacity.
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What do you think: will China’s steel exports persist at current levels, or will domestic demand rebound enough to curb shipments? Should policymakers worry more about long-term overcapacity or the near-term need to support employment and growth in heavy industry? Share your perspective in the comments.
