BUSINESS

China Steel Profits Shrink as Costs Rise and EU Carbon Tariff Bites

Published: Apr. 29, 2026 10:38 p.m. GMT+8

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Workers hoist steel pipes at a terminal of Lianyungang Port's Dongfang branch in Jiangsu province on March 27, 2026. Photo: VCG

Profits at China’s major steel mills fell in the first quarter as the industry grappled with persistently high raw material costs, sluggish domestic demand, and the financial toll of the European Union’s newly implemented carbon border tax.

First-quarter combined profits for major Chinese steelmakers dropped 5.1% year-on-year to 21.7 billion yuan ($3.2 billion), squeezing their profit margin to a razor-thin 1.46%, the China Iron and Steel Association reported Wednesday. First-quarter revenue for major steelmakers rose 1.2% year-on-year to 1.49 trillion yuan.

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Q1 profits for major Chinese steelmakers fell 5.1% YoY to 21.7B yuan ($3.2B), margin 1.46%; revenue rose 1.2% to 1.49T yuan.
Costs up 1.5% from high iron ore ($100.7/ton avg, imports +10.5% to 315M tons) and coal; domestic steel use down 4.4% to 220M tons.
EU CBAM uses discriminatory 3.2t CO2/ton default for Chinese steel, eyeing 1.42B euros ($1.7B) hit to exporters by 2028.

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