Anti-involution and its impact on the steel industry

This article explores China's anti-involution policy and its impact on the steel industry. Unlike the 2015 supply-side reform, today's focus is on curbing irrational competition and optimizing high-quality capacity. For steel, the policy may either pressure demand through tighter controls on downstream sectors like autos and photovoltaics, or create opportunities for product upgrades and higher-value growth.

Background of "Anti-Involution" Intensifying External Shocks: Escalating China–U.S. trade tensions, the widening scope of tariffs, global supply chain restructuring, and rising protectionism have severely affected China's export-oriented industries. Against this backdrop of growing external uncertainty, strengthening the domestic market has become vital for sustaining economic resilience. Distorted Price Signals: As of