Chinese steel cuts raise hopes for Korean steelmakers
Summary
Chinese steelmakers’ voluntary production cuts are raising cautious hope among Korean steelmakers that oversupply and price pressure may ease. An industry official said the impact will depend on how deeply and consistently China reduces output. The China Iron and Steel Association has urged about 45 mills, including China Baowu Group, Ansteel Group, HBIS Group and Shougang Group, to adjust production and inventories based on orders and profitability. Korea is also seeking to extend anti-dumping duties on Chinese H-beams for five more years.
Key Facts
- China’s crude steel output fell 3 percent year-on-year in the first half of 2026, while steel consumption declined 3.6 percent, according to Ansteel.
- Inventories at major Chinese steelmakers reached 16.02 million tons, the highest level in three years.
- The Korea Trade Commission recently recommended extending anti-dumping measures on H-beams imported from China for another five years.
- The proposed duties on suppliers not covered by existing price undertakings would range from 28.23 percent to 32.72 percent.
45 Chinese mills join push to curb excess supply
An aerial view shows people walking at a wholesale steel market in Shenyang, China, April 11, 2024. AFP-Yonhap
Korean steelmakers are cautiously hopeful that voluntary production cuts by about 45 Chinese mills could ease the oversupply and price pressure that have squeezed their margins, although the impact will depend on how deeply and consistently output is reduced.
“Reducing inventories and cutting production is certainly welcome and positive for the Korean steel industry,” an industry official said.
“If China were to make a drastic cut of 200 million or 300 million tons, I think it would have a very positive effect on steelmakers around the world, including those in Korea.”
The China Iron and Steel Association (CISA) recently called on about 45 steelmakers, including China Baowu Group, Ansteel Group, HBIS Group and Shougang Group, to adjust production and inventories based on actual orders and profitability rather than maintaining full production despite weak demand.
The move comes as weak property and construction demand has left Chinese mills with high inventories and deteriorating profitability.
China’s crude steel output fell 3 percent year-on-year in the first half of 2026, while steel consumption declined 3.6 percent, according to Ansteel. Inventories at major Chinese steelmakers reached 16.02 million tons, the highest level in three years.
CISA has called for mills to align production more closely with demand and profitability, but a Korean industry official said the impact would depend on the scale and durability of the cuts given China’s huge steel output.
“Cutting production and reducing inventories by Chinese steelmakers is something they have been continuing since around 2010,” he said.
“The amount reduced is larger than Korea's total production, but when viewed as a whole, it has not been a very meaningful number … The effects (of the latest initiative) will have to be assessed while monitoring the situation going forward.”
Korea has also maintained its trade defenses against Chinese steel imports. The Korea Trade Commission recently recommended extending anti-dumping measures on H-beams imported from China for another five years, including duties of 28.23 percent to 32.72 percent on suppliers not covered by existing price undertakings.
An aerial view of POSCO’s Gwangyang Steelworks in South Jeolla Province / Courtesy of POSCO
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