Will Chinas New Steel Export Rules Push Iron Ore Prices Even Lower?

Source: Kapitales Research

Highlights:

• Iron ore futures slipped after China announced new licensing requirements for the export of certain steel products from January next year.
• At the time of writing, iron ore in Singapore was down 1.3% at US$100.70 a tonne, while Dalian futures also fell 1.3% and Shanghai steel futures edged higher.
• The policy shift signals China’s push toward higher-value and greener steel exports, potentially reshaping global steel and iron ore demand.

Iron Ore Slides as Policy Shift Shakes the Market

Iron ore prices moved lower after China, the world’s largest steel producer and iron ore buyer, signalled a major policy shift in its steel export framework. At the time of writing, iron ore futures in Singapore were down 1.3 per cent at US$100.70 a tonne, extending losses after a 1.4 per cent decline last week. Yuan-denominated futures in Dalian also fell 1.3 per cent, while steel futures in Shanghai edged slightly higher.

China Tightens Grip on Steel Exports

The pullback followed an announcement from China’s Ministry of Commerce that exporters will be required to obtain licences from January 1 next year to ship a wide range of steel products overseas. The rules will apply to steel used across construction, automotive manufacturing and consumer goods, marking a notable shift in how China manages outbound supply.

Although the ministry did not offer a formal reason, the timing of the announcement is notable. China’s steel exports are on track to hit a record high in 2025, with shipments exceeding 100 million tonnes in the year through November, according to the latest trade figures, despite growing trade barriers in several overseas markets.

Focus Shifts to Higher-Value, Greener Steel

Industry consultancy Mysteel said the move reflects Beijing’s broader push to move China’s steel industry up the value chain. By reducing the share of low value-added steel exports, policymakers aim to encourage higher-quality and more environmentally friendly production. Mysteel noted that the policy also aligns with China’s longer-term carbon emission targets, as pressure mounts on the sector to transition. In the near term, producers of lower-value steel products may redirect some exports back into the domestic market. Mysteel added that shipments to regions such as Africa and Latin America could also rise as exporters adjust. Over time, the share of premium and “green” steel products in China’s export mix is expected to increase.

What It Means for Iron Ore Markets

At the time of writing, traders were weighing whether weaker steel export growth could dampen iron ore demand in the short term. The key question now is whether China’s policy shift marks a temporary disruption—or the start of a deeper structural change for global iron ore and steel markets.

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