China is preparing to roll out a licensing regime for steel exports, in what appears to be an effort to rein in record volumes of the metal flowing out of the country, raising hope of an easing global oversupply, supporting prices.

Exporters will have to seek permission to ship out a range of steel products starting from January 1, the Chinese government said in a statement. The announcement from the ministry of commerce did not give any reason for the new regulations, but the move comes at the end of a record year for China’s steel exports, which has fuelled trade tensions and depressed prices across economies unprotected by tariffs, such as India.

According to the World Steel Association, China exported 117.1 million tonnes of steel in 2024. To put it in perspective, India’s steel production — the second highest in the world — in the same year was 149.4 mt.

Permits for China’s steel exports are not new, but this plan is likely to significantly expand the scope of products covered. The ministry included a list of some 300 specific products that will require the paperwork, including types used in industries as diverse as car-making, construction or consumer goods.

While direct import from China to India showed a tapering trend in the first six months of CY2025, elevated availability of the commodity in the international market also squeezed the opportunity for Indian companies targeting those geographies. As a result, India’s import has also fallen, making it still the net importer of the metal. In FY25, China was the largest exporter to India, rising 12 per cent to 2.83 mt.

“It will be good for all (steel makers outside China),” said an executive with a private sector steel company in India. A tapered supply is also expected to support prices, both in the international and the domestic market.

Steel makers in India have flagged depressed margins due to weak steel prices, which they say does not make a business case to plough back profit for reinvestment in creating new capacities. A 90-day provisional safeguard duty at 12 per cent to shield flat steel imports, which China exports, ended in early November. The duty has not been reintroduced so far by the Modi government.

China’s steel exports defied expectations that they would come off in 2025 due to rising protectionism and anti-dumping duties as steel overcapacity meant cheap products flooded the global market. Instead, exporters have managed to shift to new markets such as Saudi Arabia and products that are not hit by any curbs. Exports are on track to hit a record in 2025, with year-to-date volumes exceeding 100 million tonnes in the first 11 months, according to the most recent trade data.