Government Interventions Stir Price Optimism, But Steel Demand Remains Uneven
March’s steel market developments were shaped by a mix of government actions, production statistics, and early indicators of shifting supply chains. From China’s cautious approach to steel curbs to Europe’s balancing act between circular economy goals and open trade, March’s World Steel Review offered a panoramic view of a complex and fragmenting industry.
China’s Steel Curbs and Their Modest Impact
On 24 March, steel prices in China ticked up following production cut announcements from two Xinjiang-based producers Kunyu Iron and Steel and Bayi Iron and Steel. Responding to government pressure, these mills confirmed a 10% cut in crude steel output. The move fuelled market speculation about possible nationwide production restrictions.
However, these cuts represented a fraction of China’s overall steel output. Xinjiang’s entire 2024 production stood at just 12.9 million metric tonnes; a 10% reduction would equate to 1.29 million tonnes, roughly 0.13% of China’s total.
Moreover, analysts questioned the motivations behind these reductions, suggesting weak local demand and low profitability may have prompted voluntary cutbacks, rather than strict adherence to policy. Larger provinces such as Hebei and Jiangsu had not followed suit, as profit margins in those hubs remained healthy.
While the National Development and Reform Commission (NDRC) signalled intentions to cut 2025 crude steel output by 50 million tonnes (or 5%), specific policies or enforcement mechanisms were yet to be announced. Traders and mills remained sceptical, citing 2023 and 2024 precedents where similar announcements failed to materialise into tangible reductions.
Still, the mere possibility of future curbs supported domestic prices: hot-rolled coil (HRC) rose to Yuan 3,380 per metric tonne ($466/mt) and rebar to Yuan 3,220/mt, according to Platts.
Global Production Contracts, Led by China
The World Steel Association reported that global crude steel production fell 3.4% year-on-year in February to 144.7 million metric tonnes. China, which still accounted for more than half of the total, produced 78.9 million tonnes, down 3.3% annually and 3.67% from January.
India stood out, posting a 6.3% year-on-year rise to 12.7 million tonnes, although this marked a 6.6% decline month-on-month. Production in the US, Japan, and Germany
continued to decline. Germany’s output fell by 13.5% year-on-year, a stark reflection of Europe’s structural challenges.
Despite these output reductions, global prices showed mixed momentum. In Europe, HRC prices remained steady at €635/mt ex-works Ruhr, up 13% since the start of the year. Meanwhile, Chinese export prices for billets and rebar saw limited movement due to weak overseas demand and currency volatility.
European Circular Economy Plans Face Trade Headwinds
On 19 March, the European Commission unveiled its Steel and Metals Action Plan, aimed at boosting metals circularity and reducing carbon emissions across the bloc. Key proposals included setting recycled content targets for steel and aluminium, prioritising scrap usage, and introducing design-for-recyclability standards.
While the recycling industry welcomed these moves, trade associations such as the Bureau of International Recycling (BIR) and EuRIC expressed concern over potential export restrictions. These, they warned, could distort global recycling markets and strain European recyclers already facing weak domestic demand.
The Commission said it was considering measures like “export fees or duties” on scrap metal to ensure availability within the EU, a stance critics labelled as protectionist. Approximately 80% of recycled materials processed in Europe are used internally, but surplus scrap is often exported. Curtailing these exports without raising local demand, BIR and EuRIC argued, would suppress prices and harm collector networks.
Nevertheless, both groups pledged to work with the EU on circular economy reforms, underlining the importance of trade openness and infrastructure investment.
Manufacturing Demand in China Holds for Now
Despite property sector weakness, China’s manufacturing-driven steel demand remained strong in Q1 2025. Government subsidies for equipment renewal and robust vehicle and appliance exports underpinned the recovery.
Platts’ Manufacturing Steel Consumption Index for January–February hit 115, its highest level for the period since 2021, indicating a 12-point year-on-year rise. Output across all seven monitored sectors, from shipbuilding to power equipment, increased.
Medium-thick HRC production grew by 9.3% year-on-year to 37.12 million tonnes, while margins on flat steel held near Yuan 200/mt. Export momentum also persisted, with China’s mechanical and electrical goods rising 4.2% year-on-year.
Yet market participants warned of a mid-year slowdown. Structural demand from households remained fragile, and rising trade barriers, particularly from India, the US, and the EU, could hit export-led growth in the latter half of 2025.
Price Movements Reflect Market Uncertainty
Global steel prices showed mild volatility. In the US, HRC dropped $5 to $945/st in Indiana, reflecting concerns about oversupply and inventory risk. In Turkey, rebar futures pointed to rising physical prices, with LME volumes increasing markedly.
Meanwhile, raw materials prices softened. Iron ore (IODEX 62% fines) fell by nearly $4/mt to $101.30 CFR North China, and Australian premium coking coal lost $8/mt to $166 FOB.