Updated: China to introduce steel export quotas

The General Administration of Customs (GACC) of China has issued a list of at least 100 types of steel or steel-containing products that will be part of an export quota system beginning Jan. 1, 2026.

In a document seen by Recycling Today, products attached to some 100 Chinese Harmonized System (HS) codes are listed, with the provider of that document indicating exporters of these items will need to apply under a quota system starting in just a few weeks.

The HS codes cover items including pig iron; ferrous alloys; finished and semifinished steel grades such as hot- and cold-rolled coil, rebar and wire; and steel scrap (HS code 7204100010).

According to a report on the quota system from the MySteel website, GACC and China’s Ministry of Commerce have jointly instituted the system.

On the global trading front, Chinese steelmaking overcapacity and sizable export quantities long have been a focus of criticism received by that nation’s government.

While diplomatic trade pressure could provide one reason for the government to introduce the quota system, a Recycling Today source says another motive could involve government suspicions that metals exporters are avoiding a tax to collect a duty on such shipments.

According to the Asia-based trader, with a quota system in place, the Chinese government can track and collect such taxes in coordination with the quota program.

Steelmakers and recyclers beyond China will be watching to see how the system genuinely affects steel trade flows from the nation.

The steel trader contacted by Recycling Today says the impact could be noticed early next year if having to pay the export tax and abide by a quota pinches the flow of billets and slabs to destinations such as Turkey and India. In those nations, slab and billet often replace the output of scrap-fed electric arc or induction furnace melt shops.

Another industry participant reached by Recycling Today expresses more caution, saying mainland Chinese mills historically can absorb losses for several months before cutting output.

The state-owned enterprises, he says, opt to retain production and employment as expected by their provincial government or the central government in Beijing.

Statistics gathered in China, however, show the construction slowdown there could be affecting steel demand and output.

In his year-end review of the Chinese economy, John Browning of Hong Kong-based BANDS Financial Ltd. writes, “New home sales in value terms fell by 25 percent year on year in November, the fastest decline since June 2024,” adding, “The structural truth remains, developers were over-levered, households were over-exposed and cities were over-built.”

In a report this week, London-based Kallanish Commodities cites China’s National Bureau of Statistics as announcing that China produced slightly less than 69.9 million metric tons (mmt) of crude steel this November, a decrease of 10.8 percent compared with November 2024 output of 78.4 mmt.

The monthly 69.9 mmt figure for November also is 2.9 percent lower compared with the 72 mmt produced by China in October and 4.9 percent lower compared with the 73.5 mmt of steel Chinese mills made in September, according to the Brussels-based World Steel Association.

This story has been updated to include recently released Chinese economic statistics.