Steel industry in China

The steel industry of the People's Republic of China started small and faced many difficulties because of wars. After important changes in how the country did business in 1978, the steel industry grew very fast. It became the biggest steel producer in the world.

Even with this big growth, the industry had many problems. It had to deal with a lot of debt, changing markets, and worries about taking care of the environment. In the years 2023 to 2024, China sold a lot of steel to other countries. This created too much steel around the world, which made prices go down. Some countries then put extra taxes on steel from China. Because of these issues, China stopped approving new steel factories and encouraged investments in other countries.

The government of China also worked to close down companies that were not making money and to make sure steel factories followed stronger rules to protect the environment.

History

China became the world's largest steel producer in the late 1990s.

20th century

See also: Technological and industrial history of the People's Republic of China §Iron and steel

From the early 1900s through both world wars, China's steel industry was small and not very developed. The industry's buildings and tools, which used technology from the Soviet Union, were mostly destroyed during the wars.

The steel industry became very important during the country's First Five-Year Plan from 1953 to 1957, when making things like power plants, steel, mining tools, machines, chemicals, and tools for protecting the country became China's main goals. Among the big steel factories built or made bigger with help from the Soviet Union, only Anshan Iron and Steel worked almost as well as they hoped by 1956. During this time, making steel slowly stopped China from growing its industries.

Because of this, Chinese leaders decided to make much more steel in late 1957 and early 1958. They put a lot of money into building big steel factories and changed how people worked in cities to make steel in different ways.

China underwent rapid economic industrialisation after Deng Xiaoping started market reforms in 1978.

The steel industry slowly made more and more steel. China made 100 million tons of crude steel each year by 1996.

21st century

China made more than 1 billion tons of crude steel in 2022, which was 52.9% of all the steel made in the world. This was much more than the 123 million tonnes (121,000,000 long tons; 136,000,000 short tons) made in 1999. After China joined the WTO, the country made steel very fast to sell to other countries and to use in its own factories making things like automotive vehicles, consumer electronics, and building materials.

The Chinese steel industry has many big factories mostly owned by the government. According to China Iron and Steel Association, the top 5 steel companies in 2015 were Baosteel Group–Wuhan Iron and Steel Corporation, Hesteel Group, Shagang Group, Ansteel Group and Shougang Group. Even in 2024, China had many steel companies.

In 2008, prices for things like iron ore went up and China had to agree to pay more to the three biggest sellers of iron ore in the world; BHP, Rio Tinto and Vale. During the 2008 financial crisis, steel factories in China saved money because people bought less steel. When people started buying more steel again in 2009 and 2010, prices went up because more people wanted cars, low interest rates, and governments around the world spent more money. Prices for iron ore were set once a year. Australian sellers of iron ore did not like this because prices did not change with what people wanted right now. In 2010, BHP and Rio Tinto wanted to change this to set prices every three months, and many Japanese and Chinese steel companies had to follow. Setting prices this way caused problems because prices changed a lot and it was harder to plan for the future. Steel factories liked setting prices for a long time so they could plan better. Rio Tinto said it would sell iron ore to people who did not agree to the new way of setting prices every three months.

In 2011 China made 45% of all the steel in the world, 683 million tons, which was 9% more than in 2010. 6 of the 10 biggest steel companies in the world were in China. Even though people kept buying steel, the companies did not make much money because they owed a lot and made too much of some kinds of steel. The government knew about this problem but could not easily fix it because local governments wanted their steel factories to keep making steel. Meanwhile, each factory tried to make even more steel.

China was the biggest seller of steel in the world in 2008. In 2008, China sold 59.23 million tons of steel, which was 5.5% less than the year before. This ended ten years of growing steel sales. By 2012, other countries put taxes on Chinese steel to stop it from being sold there, and sales had not gone back to how much they sold before 2008. People in China still wanted steel, especially in places like Xinjiang where making steel was growing.

On 26 April 2012 China’s banking watchdogs warned banks to be careful about lending money to steel companies. Because steel companies were not making much money, some had borrowed money to try to make more money in other ways. The China Iron and Steel Association said the Chinese steel industry lost 1 billion Rmb in the first three months of 2012, which was the first time it lost money since 2000.

By 2015, the steel market around the world was not doing well. Both Ukraine and Russia tried to sell a lot of steel. Because people in China did not want to buy as much steel in 2014, China sold a record 100 million metric tons of steel to other countries.

In 2015, China made 49.6% of all the steel in the world.

Efforts by the Chinese Ministry of Environmental Protection to clean the air led to steel factories in Linyi and Chengde having to use better ways to protect the environment or they would have to close.

Because people wanted less steel (see also 2015–16 Chinese stock market crash), in 2016 the Chinese government said it would close many big factories and make many workers leave their jobs. Many of these factories were not doing well and were called "zombie companies". The plan was to make 1.8 million workers (15% of all steel workers) leave their jobs in coal and steel factories by 2020.

A study from 2025 showed that from 2010 to 2023 Chinese steel products provided 53.3% of the extra steel that Latin America needed, which grew by 12.2 Mt during that time. Huachipato, the main steel company in Chile, closed in 2024 because it could not compete with cheap steel from China.

Glut

During the Chinese property sector crisis and because people in China did not want as much steel, China sold a lot more steel to other countries in 2023 and 2024. This made too much steel available around the world, which made the price of steel go down. Because of this, many countries put taxes on Chinese steel. The Chinese government answered this by stopping new steel factories from being built in August 2024. Chinese steel companies also started investing in steel factories in other countries to try to keep selling steel there.

In December 2024, Chinese scientists made a new way to make iron that makes steel much faster, according to a paper published in the journal Nonferrous Metals. This new method puts iron ore powder into a very hot furnace, which makes pure iron in just 3-6 seconds, instead of the 5-6 hours it usually takes.

When an old blast furnace is changed to use biomass as fuel, it can make both clean steel and clean hydrogen/ammonia/urea.

List of companies in China

Here are some of the big steel companies in China:

• China Baowu Steel Group
• Ansteel Group
• Jiangsu Shagang
• Hesteel Group
• Jianlong Steel
• Shougang
• Shandong Iron and Steel Group
• Valin Steel Group
• Panzhihua Iron and Steel