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II. Policy Reinforcement: New Capacity Replacement Rules Take Effect, Multiple Policies Working in Tandem

On 18 May 2026, the Ministry of Industry and Information Technology (MIIT) released the revised Implementation Measures for Capacity Replacement in the Steel Industry. The national replacement ratio for both blast furnace and steelmaking capacity was uniformly raised to no less than 1.5:1, and for mergers and acquisitions to no less than 1.25:1. The new rules include a two‑year transition period, after which capacity transfers can only be carried out through substantive mergers and acquisitions, effectively closing the loophole of “speculating on capacity quotas.” China is now implementing the largest capacity renewal programme in the history of the global steel industry, involving a total capacity of over 400 million tonnes.

At the same time, the steel industry has officially been included in the national carbon emissions trading market. The sector is actively promoting three major transformation projects: the “Quality and Brand Enhancement Project,” the “Energy & Carbon Efficiency Improvement Project,” and the “Digital Transformation Project.” On the distribution side, the CISA Distribution Branch, together with more than 40 industry associations across the country, issued the Initiative Against Involutionary Competition in the Steel Distribution Industry, publicly opposing below‑cost dumping, malicious order‑snatching, and other disruptive practices. This marks the first large‑scale joint response in the steel sector to the national policy of curbing “involution‑style” competition.

III. Export Pressures: EU and UK Sharply Tighten Steel Trade Barriers

The deterioration of the external export environment has placed considerable pressure on Chinese steel exports. As of 1 July, the EU introduced a new round of steel safeguard measures, capping annual duty‑free steel import quotas at 18.3 million tonnes – a sharp reduction of 47% compared to 2024. Imports exceeding the quota are now subject to a tariff of 50%, up from 25%. The UK simultaneously implemented new trade measures, reducing its duty‑free quota by 51% and imposing a 50% tariff on over‑quota volumes.

According to General Administration of Customs data, China exported 10.32 million tonnes of steel in June 2026, down 0.2% month‑on‑month but up 6.6% year‑on‑year, showing a marginal improvement. However, cumulative exports from January to June reached 54.874 million tonnes, down 5.6% year‑on‑year. CISA Vice Chairman Xia Nong stated that the changing external trade environment will exert significant

pressure on China’s steel exports. If demand in Germany and the broader European market fails to recover substantially, the “European channel” for Chinese steel exports will narrow markedly.

Notably, on 16 July 2026, the UK government announced the nationalisation of British Steel, owned by China’s Jingye Group, under the Iron and Steel (Nationalisation) Act. Jingye Group responded that the move “is a blatant seizure and a flagrant trampling on the rule of international law.”

IV. Green Transition: First International Standard Issued, Near‑Zero Emission Project Enters Trial Production

Green and low‑carbon development has become a central theme for the industry. On 23 January 2026, China‑led ISO/TR 25088 Guidelines for the Application of Low‑Carbon Technology in Iron and Steel Enterprises – the industry’s first international standard in the green and low‑carbon field – was officially approved and released, marking China’s transition from the world’s largest steel producer to a rule‑setter in green and low‑carbon development.

From 16 to 18 July 2026, the “National Conference on Steelmaking‑Continuous Casting Production Technology 2026” was held in Anshan, Liaoning, under the theme “Green and Low‑Carbon Steelmaking, Intelligent and Efficient Continuous Casting.” The Chinese Society for Metals noted that the steel industry has entered a critical phase of strict total control, structural restructuring, low‑carbon constraints, digital‑intelligent transformation, and high‑end quality improvement. Long‑process integrated steel mills will comprehensively promote green technologies such as cascade heat recovery, efficient ladle insulation, low‑carbon auxiliary materials, and CO₂ resource utilisation; the electric‑arc‑furnace (EAF) short‑process route is enjoying a rapid development window.

On the ground, Jingjiang Special Steel Co., Ltd. launched its first near‑zero‑carbon‑emission EAF short‑process steelmaking project into trial production, innovatively adopting a “100% green electricity + 100% scrap + super‑EAF” production model. Henan Iron & Steel Group’s Anyang Steel and Zhoukou Steel bases have passed the CISA’s “Dual‑Carbon Best Practice Energy Efficiency Benchmark Demonstration” verification and public notice, becoming the first steel enterprises in Henan Province to receive this certification.