China will ban new steel capacity and reduce production

China will prohibit new steelmaking capacity and press ahead with production cuts in its latest effort to balance supply and demand, Bloomberg reported.

The 2025–2026 sector plan, released by the Ministry of Industry and Information Technology and other agencies, also calls for boosting output of high-quality steel and promoting its use in construction and transportation.

Authorities said they will continue enforcing production cut policies, meet annual reduction targets, support leading enterprises, and push outdated, inefficient capacity out of the market.

According to Chinese media, the plan directs steelmakers over 2025–2026 to target about 4% average annual growth in value-added production, improve profitability, balance supply and demand, and optimize industry structure.

The government also urged expanding effective investment in the sector to accelerate technological upgrades, digitalization, and a green transition.

In August 2025, China’s steel output fell 0.7% year-on-year to 77.37 million tons, down 2.9% from July. It marked the third consecutive monthly decline, bringing total production for January–August to 671.81 million tons, a 2.8% drop from a year earlier.