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COMMODITY RADAR | Spotlight: STEEL
China drives growth in steel flows as the rest of the world sees a small contraction
Steel flows climb in 2025 as weak domestic demand in China leads to greater reliance on export markets. This trend has continued into 2026.
Steel flows in 2025 are 5% higher than in 2024.
China has driven the increase in outward steel flows, as its exports rose by 15%.
Elsewhere, outward steel flows fell 1% y/y.
January 2026 has seen global steel flows 2% higher than the same period last year.
Source: Steel-driven tonne-miles from Signal Ocean
Global steel flows reached 283mt in 2025, according to Signal Ocean, an increase of over 5%. This growth was driven entirely by China, which saw outward steel flows reach 119mt, up 15% y/y. China increased its share of steel flow origins from 38% in 2024 to 42% in 2025. Outside of China, combined outward flows fell 1% to 164mt.
The rise in Chinese steel flows indicates how weak domestic steel demand was in 2025. Typically, steel exports make up between 8-10% of total Chinese steel production; this almost jumped to over 12% in 2025. There is an interesting relationship between Chinese crude steel production and Chinese steel exports. When crude steel production is high, exports are typically lower, and when production is weak, exports tend to surge. Exports, therefore, function as the adjustment mechanism when China’s domestic steel market is weak.
We are yet to see China’s crude steel production figures for January 2026, but TSOP has recorded China's steel flows to be up 12% y/y, indicating that crude steel production is likely to be down. CNY also plays a big part in weak production during the first two months of any year.
Source: China steel exports from Signal Ocean
Despite expectations of lower steel production in China in 2026, the subsequent typical increase in steel exports will face some headwinds. The most notable is the new structure of export licensing in the country. This new legislation covers 245 steel products, a large increase from the 66 carbon steel products listed in the 2007 version.
Global steel demand is expected to grow modestly in 2026, with stronger performance concentrated in certain regions. This could put pressure on export opportunities due to a smaller pool of destinations. That being said, India is expected to increase consumption by over 9% in 2026. China typically accounts for only 3% of its steel exports to India, but with such a rise in demand forecast, 2026 could see a higher proportion of Chinese steel finding its way to India.
Source: China crude steel production from the World Steel Association
China's steel exports will drive supramax demand
Steel exports make up over 41% of China’s dry bulk seaborne exports, according to TSOP. From that figure, 67% is shipped by supramax. Weaker steel exports from China would weigh on supramax demand in the region. We could see more steel shipped in Handysize vessels, too, if exports become smaller in size and more opportunistic in nature.
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Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
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Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
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