Interpretation of China's Implementation of Export License Management for Steel Products and Analysis of Its Future Market Impact

Introduction: On December 12, 2025, the Ministry of Commerce and the General Administration of Customs jointly issued Announcement No. 79, deciding to adjust the "Catalog of Goods Subject to Export License Management (2025)" and include certain steel products within the scope of export license management. The introduction of this policy marks a new stage in China's steel export management, coming 16 years after the cancellation of steel export license management on January 1, 2009.

Currently, China's steel industry is facing unprecedented pressure for transformation. From January to November 2025, China's steel exports reached 107.7 million tons, a year-on-year increase of 6.7%. Annual exports are expected to reach 115 million tons, surpassing the historical peak of 112 million tons in 2015. On the other hand, global trade protectionism continues to intensify. Since 2024, China's steel industry has encountered over fifty anti-dumping cases, with the number of such cases at a historical high. Against this backdrop, the reintroduction of export license management for certain steel products serves both as a practical response to changes in the international trade environment and as a strategic choice to promote the green, low-carbon transformation of the steel industry and optimize its export structure.

I. Policy Background and Formulation Logic
1. Current Status and Challenges of China's Steel Exports
China's steel exports in 2025 showed significant growth. In terms of volume, exports from January to November reached 107.7 million tons, a year-on-year increase of 6.7%. Exports in November alone were 9.98 million tons, up 7.6% year-on-year. According to Mysteel forecasts, total steel exports for 2025 are expected to reach around 115 million tons, a year-on-year increase of about 6%, exceeding the historical high of 112 million tons in 2015.

Faced with trade barriers in traditional markets, the structure of China's steel exports is undergoing profound changes. The core coping strategy for enterprises has become "geographical market shift + product substitution": exports to Africa and Latin America increased by 3.17 million tons and 1.94 million tons year-on-year, respectively, contributing 43% and 26% to the export increment. Long products contributed 54% to the export increment, while plate exports shifted to dragging down the increment by 4%. Although this structural adjustment maintains export growth in the short term, it also exposes problems such as low product added value and high market concentration.

2. Review of Historical Policy Evolution
The management of steel export licenses in China has undergone an evolution of "implementation-cancellation-reimplementation," reflecting policy orientations and changing market environments in different periods.

On May 20, 2007, the Ministry of Commerce and the General Administration of Customs issued Announcement No. 41, implementing export license management for steel products under 83 customs commodity codes, covering major varieties such as hot-rolled coils, cold-rolled coils, and hot-rolled wire rods. The background for this policy was the excessively rapid growth of China's steel exports in 2007, and the state attempted to curb exports and ensure domestic supply through license management. The policy stipulated "one license per batch" management, with licenses valid for 3 months, applicable only to general trade exports.

On January 1, 2009, against the backdrop of the global financial crisis, the Ministry of Commerce and the General Administration of Customs issued Announcement No. 100, canceling the export license management system for steel and steel products. This policy shift reflected an orientation towards maintaining growth and promoting exports, aiming to help steel enterprises cope with shrinking international market demand.

2019 was a critical year for policy optimization. The Ministry of Commerce issued Order No. 1, revising the "Measures for the Management of Goods Export Licenses," removing the requirement for "participation certificates provided by organizers of overseas economic and trade exhibitions." Starting March 18, enterprises were no longer required to submit overseas exhibition proof and Foreign Trade Operator Registration Records when applying for export licenses, significantly simplifying the application process. On December 31, the Ministry of Commerce and the General Administration of Customs issued Announcement No. 64, implementing paperless application for export licenses and clearance procedures nationwide for goods under restricted export management starting January 1, 2020.

From this historical evolution, it is evident that steel export license management policy exhibits clear counter-cyclical adjustment characteristics: implementing management to curb exports when growth is too rapid, and canceling management to promote exports when economic downward pressure intensifies. The reintroduction of export license management for certain steel products in 2025 continues this policy logic while endowing it with new contemporary significance.

3. Connection with "Dual Carbon" Goals and Industrial Upgrading
Against the backdrop of the "dual carbon" goals and industrial upgrading, this policy adjustment holds deeper strategic significance. The steel industry, as a major carbon emitter, accounts for about 15% of national carbon emissions. 2025 is the first year the steel industry is included in the national carbon emission trading market. According to the plan, over 80% of national steel production capacity will complete ultra-low emission transformation by the end of 2025, with the target for electric furnace steel proportion rising from the current 10% to 15%.

The implementation of the EU's Carbon Border Adjustment Mechanism (CBAM) poses a new challenge to China's steel exports. CBAM will formally levy carbon tariffs starting January 2026, requiring importers to purchase electronic certificates linked to EU carbon market prices. This mechanism forces Chinese steel enterprises to accelerate green transformation. Some domestic enterprises have begun exporting green steel products, obtaining Environmental Product Declarations (EPDs) through full-process carbon verification, achieving carbon reduction of 50% per ton of steel.

The "Steel Industry Steady Growth Work Plan (2025-2026)" explicitly proposes strengthening the management of steel product exports and optimizing the export product structure. The policy orientation is shifting from past simple volume control to structural optimization, guiding enterprises to reduce exports of low value-added, high-energy-consumption products and increase exports of high-tech, high value-added products through export license management. This transformation aligns with multiple strategic needs: achieving "dual carbon" goals, industrial upgrading, and responding to international trade barriers.

II. Interpretation of Policy Content
1. Analysis of the Covered Steel Product Catalog
According to the announcement's annex, the steel products included in export license management this time cover 268 customs commodity codes, encompassing the entire industrial chain from raw materials to finished products.

• Raw Materials and Primary Products (Codes 1-25) include: non-alloy pig iron (divided into two categories by phosphorus content), direct reduced iron products, sponge iron products, recycled steel raw materials, cast iron scrap, stainless steel scrap, alloy steel scrap, iron and steel powders, iron and non-alloy steel ingots, etc. Notably, products under codes 7, 14, and 16 are required to comply with the national standard GB/T 39733-2020 "Recycled Steel Raw Materials," implemented from January 1, 2021, which classifies recycled steel raw materials into 7 major categories and 12 grades.

• Steel Billets (Codes 26-32) mainly include: square cross-section billets, continuous casting slabs, continuous casting round billets for wheels, billets with carbon content ≥ 0.25%, etc. The inclusion of these products reflects policy attention to the surge in billet exports. Data shows that billet exports in the first four months of 2025 had already exceeded the total for 2023.

• Hot-Rolled Products (Codes 33-56) include: hot-rolled coils, pickled coils, various hot-rolled coils and non-coils with thickness specifications from less than 1.5mm to over 10mm, etc. These products account for about 8% of the total included, indicating a focus on hot-rolled plate exports.

• Cold-Rolled Products (Codes 57-71) include: various cold-rolled coils and non-coils with thickness specifications from less than 0.3mm to over 3mm, and other cold-rolled flat-rolled products of iron or non-alloy steel. Cold-rolled products typically have higher added value, but their production process is energy-intensive. Their inclusion reflects control over energy consumption and carbon emissions.

• Coated Products (Codes 72-78) include: tinned, lead-plated, zinc-coated flat-rolled products of non-alloy steel, etc. Coated products are a significant variety in China's steel exports. In the first nine months of 2025, coated plate exports increased by 17% year-on-year, with major export destinations like Thailand and South Korea preparing new rounds of trade protection measures.

• Other Steel Products (Codes 113-121, 260-268) include: H-beams, I-beams, alloy steel seamless pipes for high-temperature and pressure service, etc.

Analysis of the product structure reveals a "focus on major products while allowing minor ones" characteristic: it includes both low value-added products like steel billets and some high-end products, but does not cover all steel varieties. This selective inclusion reflects a precise regulatory approach aimed at guiding export structure optimization through license management, rather than simple volume restrictions.

2. Connection with Announcement No. 65 of 2024
Announcement No. 79 clearly states, "Other unspecified matters shall be handled in accordance with Announcement No. 65 of 2024 issued by the Ministry of Commerce and the General Administration of Customs." Announcement No. 65 published the "Catalog of Goods Subject to Export License Management (2025)," containing 43 types of export goods subject to license management.

The connection between the two announcements is reflected in:

• Continuity of Management Framework: Announcement No. 79 is an adjustment and supplement to the catalog of Announcement No. 65, not an independent new policy.

• Consistency of Management Principles: The systems of "one license per batch" and "non-one license per batch" continue to be implemented.

• Applicability to Trade Modes: For the export of included steel products via processing trade, export licenses shall be applied for based on quota documents and export contracts; for export via border small-scale trade, they shall be issued by provincial-level commercial authorities according to quotas and requirements issued by the Ministry of Commerce.

This linkage arrangement ensures policy continuity and stability, allowing enterprises to adapt to new requirements within the existing management framework.

III. Analysis of Potential Market Impact
1. Short-Term Impact

• Some enterprises may shift from export to domestic sales. Concurrently, enterprises will accelerate inventory clearance to avoid increased compliance costs after the new policy takes effect.

• Enterprises will accelerate their transition to high value-added products. Large domestic enterprises, leveraging technological advantages, will focus on developing high value-added product exports. Short-process steel mills in major steel-producing provinces like Fujian and Jiangsu face greater pressure due to their single product structure and low added value.

• Starting December 15, enterprises can apply for 2026 licenses, prompting some to make early arrangements to adapt to the policy change.

2. Medium- to Long-Term Structural Impact
In the long term, export license management will have structural, deep-level impacts on China's steel exports.

• Impact on Export Product Structure: Exports of low value-added products will be constrained: Products like steel billets and hot-rolled coils will see reduced export competitiveness due to increased costs from license application. The policy will force enterprises to increase R&D investment and develop high-end steel products. The proportion of high-end plate exports is expected to increase from 37% in 2025 to 45% by 2030. Meanwhile, license application requires quality inspection certificates, promoting enterprises to establish comprehensive quality management systems and elevate product quality standards.

3. Impact on Export Market Distribution

• Exports to traditional markets like Southeast Asia and the EU may decline due to the dual effects of license management and trade barriers. In the future, export enterprises will likely accelerate the exploration of emerging markets in Africa, Latin America, the Middle East, and other "Belt and Road" regions.

• Large enterprises will further enhance their market share internationally, leveraging brand and channel advantages.

IV. Summary
Announcement No. 79 of 2025, reinstating export license management for certain steel products, is a precise regulatory policy possessing both counter-cyclical adjustment attributes and contemporary characteristics. Its core is not volume restriction, but rather, through the differentiated inclusion of 268 customs commodity codes, it aims to address the dilemma of "volume increase with price drop" and trade friction pressure, guiding the industry from scale expansion to quality and efficiency improvement.

In the short term, enterprises focused on low value-added products may face phased adjustments such as shifting to domestic sales and inventory clearance. Medium to long term, the policy will drive three major structural transformations: exports of high-energy-consumption, low value-added products will be constrained, with the proportion of high-end green steel gradually increasing—high-end plate export share is expected to reach 45% by 2030; market expansion will shift towards emerging markets like Africa and Latin America, reducing dependence on traditional markets; the industry competitive landscape will be reshaped, highlighting the advantages of large enterprises.

The policy not only connects with past management frameworks to ensure stability but also closely aligns with "dual carbon" goals and industrial upgrading, forcing enterprises towards green transformation to address green trade barriers like CBAM. In the future, enterprises need to actively adapt to compliance requirements and accelerate innovation and transformation. The industry will form a virtuous cycle of "export optimization—industrial upgrading—green development," laying a solid foundation for the high-quality development of the steel industry.