China's Steel Sector Prepares for 'Supply Reform 2.0' as Speculation Mounts

China's steel sector is poised for its biggest shake-up in a decade, with broad speculation of a possible 'Supply Reform 2.0'. Beijing is reportedly considering ordering 50 million tons of capacity reductions, possibly as soon as next week's pivotal political meeting. The action follows a slowdown in domestic construction and rising global protectionism. The sector, which is grappling with overcapacity and sustainability issues, recorded reduced profits in 2024. The proposed reform initiatives are intended to correct perennial problems, such as the property crisis that has muted domestic steel consumption for four years running. If followed through, the proposed measures have the potential to redefine the international steel market and affect global trade patterns.
Source: Bloomberg