Editor's Note
This editor’s note highlights the key facts and market implications behind “China’s Steel Output Weakens While Iron Ore Impo”, with emphasis on sourcing, product fit, fabrication, logistics, or buyer impact.
According to a report by Mining Weekly, China's steel production is declining due to weak real estate construction and falling exports, but iron ore imports continue to increase. This trend is driven by temporary factors such as inventory rebuilding and potential supply disruptions, as well as structural factors like declining domestic iron ore output and deteriorating ore quality. In the long term, China may continue to rely on iron ore imports to meet its steel production needs.
China produces slightly more than half of the world's steel. In April, China's steel output was 86.63 million tons, down 2.8% from the same month in 2025, marking the weakest April data since 2018. In the first four months of the year, steel output was 331.12 million tons, down 4.1% year-on-year, mainly due to persistently weak real estate construction and declining exports.
However, iron ore imports increased by 8% in the first four months of the year, reaching 418.6 million tons. China's April iron ore imports were 103.9 million tons, down 0.8% from March's 104.74 million tons; but since April has one fewer day than March, the daily average actually increased slightly. The market expects imports to remain relatively strong in May, with DBX Commodities analysts estimating seaborne arrivals at 104.67 million tons.
A long-term factor driving iron ore imports is the slow decline in China's domestic iron ore output, exacerbated by deteriorating ore grades, meaning that even if the same amount of ore is mined, the actual iron content produced is lower. According to MySteel data, China's iron ore output in the first four months of the year was 326.8 million tons, down 1% year-on-year. In 2025, China's iron ore output had already fallen by 2.8%, from 1.04 billion tons in 2024 to 983 million tons.
Over the past two decades, China has built the world's largest steel industry chain, relying on real estate, high-speed infrastructure, and export-oriented manufacturing. However, with the adjustment of the real estate bubble, slowing global demand, and rising energy and geopolitical risks, China's steel market is gradually entering a new phase. The changes in iron ore imports and domestic supply structure are important signals of this transformation.
China's past steel demand was highly dependent on residential construction, with the real estate sector once accounting for nearly 30% of China's GDP and driving massive demand for rebar, hot-rolled steel plates, and building materials. However, since the Evergrande crisis, China's real estate market has continued to deleverage, with a large number of projects halted, local government finances deteriorating, and population growth slowing with a declining young population, making it difficult for housing demand to recover to past peaks.
On the other hand, China's steel exports are also facing pressure. In recent years, China has absorbed excess capacity through low-priced steel exports, but as the global economy slows and protectionism rises, many countries have launched anti-dumping investigations and tariff restrictions on Chinese steel. In the first four months of the year, China's steel exports fell by 9.7% year-on-year, indicating weakening external demand.
However, despite weakening demand, China's steel industry has become more dependent on imported iron ore. One important reason is the continuous deterioration in the quality and output of domestic iron ore. Therefore, even as total steel output declines, China still needs to import large quantities of high-grade iron ore to improve steelmaking efficiency and reduce pollution. This is also why iron ore exports from Australia and Brazil remain strong.
This also exposes China to long-term raw material security issues. China is the world's largest steel producer, but it is highly dependent on iron ore imports, especially from Australia. In recent years, China has tried to reduce its dependence on Australia through the Simandou iron ore project in Guinea, Africa, but it is difficult to change the global supply pattern in the short term. Against this backdrop, the importance of high-grade imported iron ore will continue to rise, as high-grade ore can reduce coking coal consumption and carbon emissions, aligning with China's carbon neutrality policy direction.
Source: Read the original article | Published: May 27, 2026