Chinese Steel Exports to Drop as Barriers Mount, Says Goldman

Goldman Sachs projects a decline in Chinese steel exports, which reached a nine-year high of 111 million tons in 2023, forecasting a 3% moderation in 2025 followed by a sharper one-third drop in 2026. Mounting trade barriers, particularly anti-dumping investigations, and decreasing domestic production are cited as the primary headwinds to Chinese steel exports.

Analysis

Goldman Sachs Group Inc. projects a significant shift in the global steel market, forecasting that the recent surge in Chinese steel exports has likely peaked. After reaching a nine-year high of 111 million tons last year, Chinese steel exports are anticipated to moderate by 3% in 2025, followed by a more substantial contraction of one-third in 2026. This projected decline is attributed primarily to mounting trade barriers, specifically a substantial number of ongoing anti-dumping investigations worldwide, and an expected fall in China's domestic steel production. The expected reduction in Chinese steel supply on the international market indicates a potential easing of competitive pressures for producers in other regions and could reconfigure global steel trade dynamics.

Key Decisions for Investors

• Investors should closely monitor the outcomes of ongoing anti-dumping investigations concerning Chinese steel, as these represent a primary driver for the forecasted export reduction.
• Consider evaluating steel producers in regions that might benefit from reduced competition from Chinese exports, potentially leading to improved pricing power and market share for local manufacturers.
• Assess the potential impact on demand for steelmaking raw materials, such as iron ore and coking coal, if Chinese domestic steel production contracts significantly in line with Goldman Sachs' projections.