China’s Net Steel Exports Rise to 113 Million Tonnes in 2025, with Destinations Shifting Toward More Distant Markets
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China’s Net Steel Exports Rise to 113 Million Tonnes in 2025, with Destinations Shifting Toward More Distant Markets
Driven by widening price differentials between Chinese and global steel markets, China’s net steel exports grew 10% year-over-year to 113 million tonnes in 2025. As freight costs became a smaller share of profit margins, exports exhibited a 'going farther' trend: ASEAN and South Korea saw declining shares, while Brazil and Saudi Arabia significantly increased their imports.
- In FY2025, China’s net steel exports reached 113 million tonnes, up 10% YoY, primarily due to record-wide price differentials between China and global markets.
- Exports showed a clear 'going farther' pattern: the combined share of ASEAN and South Korea in China’s exports fell from a long-term average of 43% to 34% in 2025.
- Distant markets like Brazil and Saudi Arabia significantly increased imports; Saudi Arabia has become China’s fifth-largest steel export destination.
- With higher absolute steel prices, freight costs represented a smaller proportion of profit margins, making long-haul shipments economically viable.
- Looking ahead to 2025, if global price differentials narrow, total Chinese exports are expected to contract, and the share destined for neighboring markets may decline further.
Report interpretation
Overview
This report examines both the volume growth and structural shifts in China’s steel exports in 2025. The core finding is that widening price differentials between China and major global markets drove net steel exports to 113 million tonnes in 2025, a 10% year-over-year increase. Simultaneously, there was a significant structural shift in export destinations, exhibiting a pronounced 'going farther' trend: traditional nearby markets (e.g., South Korea, ASEAN) saw declining shares, while demand from distant markets (e.g., Brazil, Saudi Arabia) surged. The underlying rationale is that high absolute prices and robust profit margins reduced the relative impact of freight costs, enabling economically feasible trade over longer distances.
Core views
Export volumes continue to rise, with price differentials as the key driver. In FY2025, China’s net steel exports reached 113 million tonnes, up from 104 million tonnes in FY2024 and a substantial increase from 83 million tonnes in FY2023. Although the FY2022 level (57 million tonnes) remains 43% below the 2015 peak, net exports have steadily rebounded alongside widening price gaps between China and key global markets. The report attributes this growth primarily to near-record price differentials. Export destination structure is being reshaped, with a clear 'going farther' trend. Over the past 15 years, ASEAN and South Korea collectively accounted for an average of 43% of China’s steel exports, but this share dropped to 37% in FY2024 and further declined to 34% in FY2025. Specifically, South Korea—the largest single destination—saw its share fall from around 14% over the past decade to just 6% in FY2025; ASEAN’s share also decreased from 33% to 28%. Meanwhile, shipping distances lengthened significantly. Brazil and Saudi Arabia substantially increased steel imports from China over the past two years. Although Brazil’s imports moderated slightly in 2025 due to import tariffs, Saudi Arabia’s imports remained strong. By 2025, Saudi Arabia had surpassed all markets except Vietnam, South Korea, Thailand, and the Philippines to become China’s fifth-largest steel export destination, accounting for 4.6% of total exports. Changing freight cost dynamics support long-distance trade. Since 2016, freight costs as a share of steel prices (and profits) have continuously declined. During periods of low steel prices (e.g., 2015–2016), exports to ASEAN once reached 36–37% of the total. However, as prices and profit margins rose, the relative burden of freight diminished, enabling sales to more distant markets. The report notes that if steel prices normalize and freight costs again represent a larger share of profits, exports to nearby markets like ASEAN could rebound.
Analysis framework
The report combines 'volume-price decomposition' with 'geographic flow analysis.' First, it tracks historical changes in China’s net steel export volumes to establish overall growth trends. Second, it analyzes shifts in destination market shares, comparing nearby markets (South Korea, ASEAN) with distant ones (Brazil, Saudi Arabia) to reveal structural reallocation. Finally, it introduces the key variable of 'freight cost as a share of profit' to explain why, under conditions of high price differentials and elevated absolute prices, long-distance trade becomes more economically viable—thus constructing a complete logical chain from price differentials to logistics radius to destination structure.
Methodology notes
Volume-Price Decomposition
By decomposing changes in total export volumes into price factors (price differentials) and quantity factors (destination shifts), this approach helps readers understand that export growth is driven not merely by rising demand but by evolving arbitrage opportunities.
Freight Cost as Share of Profit Analysis
The report presents an intuitive economic logic: when absolute commodity prices and profit margins are sufficiently high, fixed or semi-fixed freight costs constitute a smaller share of total profits, incentivizing traders to ship goods over longer distances to capture higher prices or access larger markets—thereby explaining the 'going farther' phenomenon.
Key data
- FY2025 Net Steel Exports from China113 million tonnesUp 10% YoY from 104 million tonnes in FY2024
- FY2024 Net Steel Exports from China104 million tonnesUp 25% YoY from 83 million tonnes in FY2023
- Export Share to ASEAN and South Korea (2025)34%Significantly down from the long-term average of 43%; was 37% in FY2024
- Export Share to South Korea (FY2025)6%Sharply down from the decade-long average of ~14%; was 8% in FY2024
- Export Share to Saudi Arabia (2025)4.6%Became China’s fifth-largest export destination, with sustained strong import growth
Impact & implications
The report suggests that the 'going farther' trend in China’s steel exports reflects a dynamic realignment of global steel trade patterns. For nearby markets (e.g., South Korea, ASEAN), competitive pressure from Chinese steel may ease slightly due to declining export shares—but this is largely a natural contraction driven by narrowing price differentials. For distant markets (e.g., Middle East, Latin America), continued inflows of Chinese steel will affect local supply-demand balances. If global price differentials narrow in the future, China’s total export volume is expected to contract, and the export mix may shift back toward neighboring regions.
Risks
- Narrowing global steel price differentials could lead to a contraction in China’s total export volume.
- Import tariffs imposed by destination countries (e.g., Brazil) may dampen demand for Chinese steel.
- Normalization of steel prices could increase the relative share of freight costs, altering export destination structures.
What to watch
- Changes in steel price differentials between China and major global markets.
- Whether the export shares of ASEAN and South Korea in China’s steel exports continue to decline.
- Import policies and demand sustainability in distant markets such as Brazil and Saudi Arabia.
- Absolute steel price levels and their impact on freight cost as a share of profit.