Chinese steel output is drawing scrutiny as some analysts question whether it fell last year as sharply as official figures show, highlighting a discrepancy that could upend views on the country’s appetite for iron ore and other feedstocks.
The National Bureau of Statistics said last month that crude steel output dropped 4.4% in 2025 to 961 million tons. It’s the first time in six years that the annual figure has fallen below 1 billion tons, following pledges by the government to fix chronic overproduction in the industry. But analysts at JPMorgan Chase & Co. and consultancy AME Group argue that underlying activity was significantly stronger.
The gap matters because China churns out over half the world’s steel, and consumes the lion’s share of the iron ore that anchors revenues at mining giants such as BHP Group, Rio Tinto Group and Vale SA. If steel production was more resilient than officially reported, demand for iron ore and other inputs like coking coal may have held up better than assumed, which could suggest tighter global supply and a better outlook for earnings.
JPMorgan estimated that roughly 60 million tons of crude steel production went unreported last year, according to a note last week, implying the real total nudged above 1 billion tons and was down just 0.4% from 2024.
The bank pointed to China’s record 1.26 billion tons of iron ore imports in 2025, alongside an estimated 290 million tons of domestic ore output. Taken together, the volumes suggest steel mills had ample supplies that would reduce usage of scrap steel as an alternative feedstock, with implications for the industry’s efforts to decarbonize.
In a separate report this month, AME offered an even higher estimate that production actually rose 2.1% in 2025 to 1.06 billion tons, near the record high set in 2020. A swing of that magnitude would be larger than the annual output of many steel-producing countries. The consultancy also highlighted iron ore market dynamics as evidence for its higher figure.
“We’ve seen higher-than-expected imports, with record volumes coming from Australia and Brazil, which more than offset a slight dip in domestic iron ore production,” said AME analyst Lucas Brown in Sydney. “While inventories did increase slightly, the net growth in iron ore consumption outpaced this, which supported prices in the fourth quarter of last year,” he said.
Having held above $100 a ton since August, Singapore iron ore futures have tumbled this month. Prices rose 1.2% to $96.95 a ton at 12:30 p.m. local time.
The statistics bureau didn’t immediately respond to a fax seeking comment. China’s steel industry is often prone to skepticism over its reported figures, given the need to heed official guidance without being given hard targets by the government.
Less Scrap
JP Morgan estimated scrap consumption at about 166 million tons in 2025, down from roughly 200 million tons in 2020. Less scrap usage indicates heavier dependence on carbon-intensive blast furnaces, rather than electric arc furnaces that melt recycled metal.
AME estimated that the share of producing crude steel from scrap has plunged from 7.2% in 2020 to just 3.3% in 2025, based on calculations from officials statistics. The steep decline appears “at odds with longstanding policy efforts” to cut the industry’s emissions, it said.
