China tightens export controls with new licensing regime

Chinese steel market participants are uncertain about the influence of a newly announced export licensing system introduced by China’s Ministry of Commerce and the General Administration of Customs of the People’s Republic of China (GACC). 

A joint statement issued by the two organisations on December 12 revealed that export licensing would be reintroduced to steel exports from January 1, following a 16-year absence. Exporters will have to obtain permission to ship steel under the new measures, which cover 300 products, including both carbon and stainless material. 

Some MEPS respondents have speculated that the introduction of licensing could curb exports in 2026, applying additional downward pressure to domestic prices. MEPS’s China hot rolled coil price, which excludes VAT, has declined by 9.3% in 2025, to CNY2,956 per tonne, with the price of rebar down by 9.8% at CNY2,785 per tonne. 

Shifting away from ‘volume over price’ 

Speaking at the December 12 announcement of China’s new licensing regime, Chen Leiming, executive president and secretary-general of the China Metal Materials Circulation Association said that a “volume over price” export model increases energy use, carbon emissions and the risk of trade disputes. The average price of steel exported from China has declined by 10.2% year-on-year during the first six months of 2025, falling to USD699 per tonne (CNY5,030 per tonne). 

However, the initial announcement of the new licensing regime made no explicit reference to restrictions on China’s steel export volumes. It is more likely that licensing will be used to tighten China’s VAT rules. It may also allow the customs authority to track the price of exported steel products, helping to monitor the industry’s shift away from commodity grade production, towards value-added material. 

• This article was first published in the December edition of MEPS's International Steel Review. The monthly report provides subscribers with steel prices, indices, market commentary and forecasts from key global steel markets in North America, Europe and Asia. Contact MEPS for details of how to subscribe.

Last month’s International Steel Review keynote article highlighted the Chinese government’s new 2025-2026 Steel Industry Growth Stability Work Plan that targets 4% annual growth in added value in 2025-26. 

Chinese steel exports continued to rise in November, data published by the GACC shows. Finished steel exports reached approximately 107.7 million tonnes in the first 11 months of the year, up by 6.7% year-on-year. Consequently, the country is on track to exceed the record high of 110.7m tonnes exported in 2024. 

China’s evolving export mix 

Year-to-date, to the end of November, Chinese exports of long products rose by 44%, to 15.8m tonnes. Exports of billets and semi-finished products also increased significantly, rising by around 375% to 9.5m tonnes. 

This increase in exports comes despite continued cuts in domestic production. Data published by the National Bureau of Statistics of China revealed that crude steel production was down by 10.9% year-on-year in November, at 69.9m tonnes. That leaves China’s crude steel output down by 4% year-to-date at the end of November, at 891.7m tonnes. 

Growing trade defences have forced China’s exporters to diversify their target markets. Japan, South Korea and Vietnam absorbed 27% of Chinese steel exports in the January to November period, down from 33% a year earlier. The Middle East received 18% of exports, up from 14% a year earlier, as Africa’s share of China’s steel exports rose from 9% to 13%. 

The Chinese government’s steps to control steel exports more tightly, and a focus on value-added material, may mitigate the risk of further tariffs and antidumping duties on Chinese-origin steel (see this month’s Market and Industry Scene). This could also limit the need for exporters to make such strategic shifts in years to come.