Analysis: Rumoured China's 50 million crude steel production cut - Is it realistic?

In order to meet the 2025 pig iron production target of 809.37 million tons (derived from the rumoured 50 million crude steel cut), daily output must drop from an estimated 2.42 million tons/day in April to an average of 2.12 million tons/day from May to December.

The estimated daily average production appears unrealistically low, raising doubts over the credibility of this rumour. If credible, as steel mills in China enjoy better profits, the downside for coking coal prices will not be significant; however, structurally softer supply will make it harder for domestic mines to balance production and pricing.

• 1. 2024 Official Data:

Crude steel output: 1,005.09 million tons

Pig iron output: 851.74 million tons

• 2. 2025 Target:

Crude steel output target after 50 million tons reduction: 955.09 million tons

• 3. Pig Iron to Crude Steel Ratio (2024):

851.74 ÷ 1,005.09 ≈ 0.8474

• 4. Pig Iron Production Reduction Needed:

50 × 0.8474 ≈ 42.37 million tons

• 5. 2025 Pig Iron Output Target:

851.74 - 42.37 = 809.37 million tons

• 6. January–March 2025 Actual Pig Iron Output:

216.28 million tons

• 7. April 2025 Estimated Pig Iron Output:

Total estimated April production = 72.596 million tons

Average daily production in April = 2.4199 million tons/day

• 8. January–April 2025 Cumulative Pig Iron Output:

216.28 + 72.596 = 288.876 million tons

• 9. Remaining Pig Iron Output Target for May–December:

809.37 - 288.876 = 520.494 million tons

• 10. Days in May–December:

245 days

• 11. Required Average Daily Pig Iron Output for May–December:

520.494 ÷ 245 ≈ 2.1244 million tons/day

(or 212.44 × 10,000 tons/day)