China’s steel exports expected to falter in 2025 as pain from tariffs spread
JIUJIANG, CHINA – JUNE 17: A worker manufactures seamless steel gas cylinders for export at the workshop of Sinoma Science & Technology (Jiujiang) Co., Ltd. on June 17, 2024 in Jiujiang, Jiangxi Province of China.
Wei Dongsheng | Visual China Group | Getty Images
China’s steel exports will soon hit an eight-year high, before sweeping tariffs sink in and drag down the industry in 2025, industry watchers said.
As the biggest exporter of steel, China accounts for about 55% of the world’s steel production. The country’s steel exports have been surging this year and are expected to smash through the 100 million metric ton mark, matching levels last seen in 2016.
Strategists at Macquarie Capital predicted that China’s steel exports will reach 109 million tons this year, before declining to 96 million tons in 2025. Trade tariffs could further curb China’s steel exports, “albeit this may require a while to play out,” analysts from the the investment bank told CNBC.
Their predictions were echoed by analysts interviewed by Citigroup. China’s steel shipment is “skewed to the downside” from next year and onwards due anti-dumping measures, Ren Zhuqian, an analyst from steel consultancy Mysteel, said in a Citigroup note this month.
Foreign markets have been particularly crucial amid a domestic supply glut, as China’s economy grapples with a prolonged property crisis and slowdown in manufacturing activities.
In September, China’s steel exports jumped 26% from a year ago to 10.2 million tons, surpassing the 10-million ton a month benchmark that was last hit in June 2016. In the first nine months of the year, exports rose 21.2% year on year to 80.7 million tons, according to the customs data last week.
After hitting a record high of 112 million tons in 2015, the country’s steel exports had been on a multi-year slide before it started improving in 2020.
Steel export growth has accelerated ever since, propelled by a lack of domestic demand, even as overall export growth in China slowed sharply in September on the back of a series of disappointing data that pointed to a weak economy.
Anti-dumping ‘Wac-A-Mole’
Floods of cheap steel from China had sparked concern among its trading partners of unfair competition for domestic steelmakers. More and more have ramped up anti-dumping measures, including hefty tariffs.
Steel producers in importing countries have been “under massive strain,” said Chim Lee, senior analyst at the Economist Intelligence Unit, especially those in Southeast Asia and the Middle East.
Thailand expanded anti-dumping duties to 31% on hot-rolled coil, high-strength steel used for critical infrastructure construction, from China in August. Mexico imposed a nearly 80% tariff on some Chinese steel imports late last year.
This month, Brazilian government imposed 25% tariffs on all steel products from the country. And Canada’s 25% surtax on Chinese steel products, which it announced in August, came into effect on Tuesday.
These kinds of protectionism measures tend to have short-lived impacts, said Tomas Gutierrez, head of data at consultancy Kallanish Commodities, as steel exporters resort to measures such as “circumvention,” shaking off the China-label by making transits through a third-party country.
We see a ‘whac-a-mole’ scenario: when one country starts to limit steel imports from China, Chinese steel producers are likely to redirect them to another country until that market, too, imposes new trade restrictions.
Chim Lee
Senior analyst, Economist Intelligence Unit
But Vietnam’s ongoing anti-dumping probe into hot-rolled coil could derail China’s export momentum as it “impacts a much higher volume of Chinese steel,” Gutierrez said.
Vietnam is a major importer of Chinese steel, consuming about 10% of the country’s steel exports in 2023, according to a Mysteel report. Other top destination markets include Thailand, India and Brazil.
Last month, Indian government ordered tariffs of between 12% and 30% on some steel products imported from China and Vietnam, escalating an anti-dumping duty it imposed on Chinese steels last year.
“We see a Whac-A-Mole scenario,” EIU’s Chim said. The tariffs lead Chinese steel producers to redirect to alternative markets, “until that market, too, imposes new trade restrictions.”
U.S. President Joe Biden’s administration called for tripling tariffs on Chinese steel in April, and Republican presidential nominee Donald Trump said he could raise tariffs by 60% on Chinese goods if re-elected next month.
But the impact of these threats from Washington would be rather limited, as less than 1 percent of Chinese steel exports, worth $85 billion, were shipped to the U.S. in 2023.
Dwindling demand
For the first time in six years, the World Steel Association this month forecast that China’s domestic steel demand this year would account for less than half of global demand, citing “the ongoing downturn” in the country’s real estate sector.
China’s property-related steel demand may not see a substantial improvement until 2025 or 2026, EIU’s Chim said, as Beijing seeks to curb new housing supplies while clearing existing housing inventories.
New construction starts, the most steel intensive part of the property construction process, will continue to be very weak, Chim said.
Meanwhile, he added, state-led infrastructure investment, which has increasingly pivoted away from roads and railways to energy infrastructure, is unlikely to fill the gap left by home builders.
More domestic steelmakers had scaled back production given poor profitability on steel sales. Almost three-quarters of Chinese steel companies reported losses in the first six months this year, with many at risks of bankruptcy.
China’s production of medium-thick hot-rolled coil — a proxy of flat steel products — fell 5.4% from the prior month in September, and 6.4% on year, according to S&P Global, which cited official customs data.
On escalating trade tensions, a spokesperson for China’s customs administration said a majority of Chinese steel products were to meet domestic demand, before receding that the hard-rolled coils “would have broad appeal in overseas market,” due to continuous innovation and product upgrades in the industry.
A possible tax crackdown
Beijing’s possible crackdown on value-added tax could make matters worse for China’s steel industry.
This year, steel mills have been under pressure from regulators over allegations that they skirted taxes to make exports even cheaper.
Authorities had set up an investigative team to crack down on these “illegal” steel exports, Luo Tiejun, vice president of the state-backed Iron and Steel Industry Association, said in a meeting last week.
“If China really followed through [with the investigation], Chinese exports would be much less competitive and export volumes could come down,” Gutierrez said. But the government may not have the “confidence” for that yet.
Wind energy powered 20% of all electricity consumed in Europe (19% in the EU) in 2024, and the EU has set a goal to grow this share to 34% by 2030 and more than 50% by 2050.
To stay on track, the EU needs to install 30 GW of new wind farms annually, but it only managed 13 GW in 2024 – 11.4 GW onshore and 1.4 GW offshore. This is what’s holding the EU back from achieving its wind growth goals.
Three big problems holding Europe’s wind power back
Europe’s wind power growth is stalling for three key reasons:
Permitting delays. Many governments haven’t implemented the EU’s new permitting rules, making it harder for projects to move forward.
Grid connection bottlenecks. Over 500 GW(!) of potential wind capacity is stuck in grid connection queues.
Slow electrification. Europe’s economy isn’t electrifying fast enough to drive demand for more renewable energy.
Brussels-based trade association WindEurope CEO Giles Dickson summed it up: “The EU must urgently tackle all three problems. More wind means cheaper power, which means increased competitiveness.”
Permitting: Germany sets the standard
Permitting remains a massive roadblock, despite new EU rules aimed at streamlining the process. In fact, the situation worsened in 2024 in many countries. The bright spot? Germany. By embracing the EU’s permitting rules — with measures like binding deadlines and treating wind energy as a public interest priority — Germany approved a record 15 GW of new onshore wind in 2024. That’s seven times more than five years ago.
If other governments follow Germany’s lead, Europe could unlock the full potential of wind energy and bolster energy security.
Grid connections: a growing crisis
Access to the electricity grid is now the biggest obstacle to deploying wind energy. And it’s not just about long queues — Europe’s grid infrastructure isn’t expanding fast enough to keep up with demand. A glaring example is Germany’s 900-megawatt (MW) Borkum Riffgrund 3 offshore wind farm. The turbines are ready to go, but the grid connection won’t be in place until 2026.
This issue isn’t isolated. Governments need to accelerate grid expansion if they’re serious about meeting renewable energy targets.
Electrification: falling behind
Wind energy’s growth is also tied to how quickly Europe electrifies its economy. Right now, electricity accounts for just 23% of the EU’s total energy consumption. That needs to jump to 61% by 2050 to align with climate goals. However, electrification efforts in key sectors like transportation, heating, and industry are moving too slowly.
European Commission president Ursula von der Leyen has tasked Energy Commissioner Dan Jørgensen with crafting an Electrification Action Plan. That can’t come soon enough.
More wind farms awarded, but challenges persist
On a positive note, governments across Europe awarded a record 37 GW of new wind capacity (29 GW in the EU) in 2024. But without faster permitting, better grid connections, and increased electrification, these awards won’t translate into the clean energy-producing wind farms Europe desperately needs.
Investments and corporate interest
Investments in wind energy totaled €31 billion in 2024, financing 19 GW of new capacity. While onshore wind investments remained strong at €24 billion, offshore wind funding saw a dip. Final investment decisions for offshore projects remain challenging due to slow permitting and grid delays.
Corporate consumers continue to show strong interest in wind energy. Half of all electricity contracted under Power Purchase Agreements (PPAs) in 2024 was wind. Dedicated wind PPAs were 4 GW out of a total of 12 GW of renewable PPAs.
Read more: Renewables could meet almost half of global electricity demand by 2030 – IEA
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
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In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the official unveiling of the new Tesla Model Y, Mazda 6e, Aptera solar car production-intent, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
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The Chinese EV leader is launching a new flagship electric sedan. BYD’s new Han L EV leaked in China on Friday, revealing a potential Tesla Model S Plaid challenger.
What we know about the BYD Han L EV so far
We knew it was coming soon after BYD teased the Han L on social media a few days ago. Now, we are learning more about what to expect.
BYD’s new electric sedan appeared in China’s latest Ministry of Industry and Information Tech (MIIT) filing, a catalog of new vehicles that will soon be sold.
The filing revealed four versions, including two EV and two PHEV models. The Han L EV will be available in single- and dual-motor configurations. With a peak power of 580 kW (777 hp), the single-motor model packs more power than expected.
BYD’s dual-motor Han L gains an additional 230 kW (308 hp) front-mounted motor. As CnEVPost pointed out, the vehicle’s back has a “2.7S” badge, which suggests a 0 to 100 km/h (0 to 62 mph) sprint time of just 2.7 seconds.
To put that into perspective, the Tesla Model S Plaid can accelerate from 0 to 100 km in 2.1 seconds. In China, the Model S Plaid starts at RBM 814,900, or over $110,000. Speaking of Tesla, the EV leader just unveiled its highly anticipated Model Y “Juniper” refresh in China on Thursday. It starts at RMB 263,500 ($36,000).
BYD already sells the Han EV in China, starting at around RMB 200,000. However, the single front motor, with a peak power of 180 kW, is much less potent than the “L” model. The Han EV can accelerate from 0 to 100 km/h in 7.9 seconds.
At 5,050 mm long, 1,960 mm wide, and 1,505 mm tall with a wheelbase of 2,970 mm, BYD’s new Han L is roughly the size of the Model Y (4,970 mm long, 1,964 mm wide, 1,445 mm tall, wheelbase of 2,960 mm).
Other than that it will use a lithium iron phosphate (LFP) pack from BYD’s FinDreams unit, no other battery specs were revealed. Check back soon for the full rundown.
Source: CnEVPost, China MIIT
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