In 2017, China used a hard “June 30” deadline to purge roughly 140 million tonnes of “ground-strip steel” (ditiaogang) capacity. But the furnaces did not disappear. Customs data tells the rest: after the ban, Southeast Asia's share of China's electric-furnace equipment exports climbed as high as 40.6%, and Indonesia's imports rose roughly 19-fold over eight years to become the world's No. 1 destination. The collapse of the State Audit Office tower in Bangkok sounded the first alarm.

August 9, 2026, afternoon — a private steel plant in Ramgarh district suffered a furnace explosion. High-temperature molten metal was ejected, leaving at least nine workers with burn injuries, two of them in critical condition. In terms of single-plant output, this is an incident with virtually no measurable impact on the market. But placed against the backdrop of India's crude steel capacity expanding by 40 million tonnes over three years while utilisation rates have been declining, it points to something else entirely. Viewed within the 2026 timeframe, this incident is not isolated. On January 22 , an explosion in the dedusting chamber of a sponge iron plant in Baloda Bazar, Chhattisgarh killed six workers and injured five; the plant was subsequently sealed by local authorities. On April 6 , in the early hours, a furnace explosion at another private steel plant in the Hesla area of the same Ramgarh district injured nine workers — seven of whom sustained burns covering more than 60% of their body surface area — and ultimately claimed three lives. The state's Labour and Employment Department formed a seven-member investigation panel, and India's National Human Rights Commission (NHRC) took up the case suo motu. On June 8 , a ladle containing approximately 1,500°C of liquid steel exploded in the continuous casting section of Steelmaking Shop No. 1 at the state-owned Visakhapatnam Steel Plant (RINL), killing eight workers on the spot and injuring six; by June 14, the death toll had risen to ten. Public reporting did not name the plant involved in the August incident, but the configuration of private steel mills in Ramgarh district follows a highly templated pattern that allows capacity to be inferred. Taking Jharkhand Ispat in Hesla — within the same district — as a reference: the facility operates four coal-based rotary kilns at 100 tonnes/day on approximately 14 acres, producing 120,000 tonnes/year of sponge iron (DRI), paired with two 12-tonne induction furnaces and a two-strand continuous caster, yielding 72,000 tonnes/year of billets. Aloke Steels and Ramgarh Sponge Iron within the county share the same four-kiln, 100-tonne/day configuration; the latter's expansion plan adds a 350-tonne/day kiln to bring DRI output to 225,000 tonnes/year. A separate pre-feasibility report submitted to the environmental regulator reveals that a mill in Marar village within the same district plans to replace its existing 3-tonne and 6-tonne induction furnaces with three 10-tonne units, lifting billet capacity from 75,000 to 158,400 tonnes/year. Taken together, the typical single-plant billet capacity range for this category of mill runs between 70,000 and 160,000 tonnes/year — which is precisely why this incident will leave no measurable imprint on either national or state-level supply balances, even if melting operations are suspended for several weeks. What genuinely warrants attention is the shifting weight of this capacity tier within the aggregate, and the pace at which it continues to expand. India's Steel Value Chain: Capacity Expanding, Utilisation Declining According to the response submitted by India's Ministry of Steel to the Rajya Sabha on August 8, 2026, national crude steel output rose from 144.3 million tonnes in FY2023-24 to 170.15 million tonnes in FY2025-26, while capacity expanded from 179.51 million tonnes to 220.41 million tonnes over the same period; per capita finished steel consumption climbed from 97.7 kg to 115.7 kg. Yet within the same submission, capacity utilisation slipped from 80.4% to 77.2%. Capacity is growing faster than output — this is the essential starting point for understanding everything that follows. India's secondary steelmaking strategy follows a distinctly different path from that of Western economies. Whereas electric arc furnace (EAF) steelmaking in developed markets is predominantly scrap-fed, India — constrained by insufficient scrap generation but endowed with abundant iron ore resources — has developed the coal-based DRI paired with induction furnace (DRI-IF) route. India has been the world's largest producer of direct reduced iron (DRI) for multiple consecutive years, with approximately 80% of output coming from coal-based rotary kilns. SMM tracking data shows that India's sponge iron output grew from 34.7 million tonnes in FY2018-19 to 51.5 million tonnes in FY2023-24, a CAGR of 8% — outpacing crude steel's 5% CAGR over the same period — with 71% of FY2023-24 production attributable to SMEs. For the April–September 2025 period, India's sponge iron output reached approximately 29 million tonnes, up 9% year-on-year. Against the backdrop of India's rapid steel industry expansion, it is precisely the smallest enterprises — those with the weakest capital expenditure capacity — that are bearing the highest-risk operational segments. Their capacity has also expanded the fastest over the past year under market incentives: in FY2025-26, India's crude steel capacity grew 10% year-on-year to 233 million tonnes, with induction furnace capacity surging 16% to 91 million tonnes — outpacing the 7% growth in BOF (basic oxygen furnace) capacity and 6% in EAF capacity. When capacity expansion, declining utilisation, and intensifying competition in the long products market converge, the expenditure line items that are typically compressed first are not output volumes — but rather incoming raw material inspection, drying and covered stockyard management, and the replacement frequency of personal protective equipment (PPE). India's steel capacity expansion has outrun its safety carrying capacity. Over three years, installed capacity added 40.9 million tonnes while output grew by only 25.85 million tonnes; utilisation fell from 80.4% to 77.2%. The fastest-expanding segment — sponge iron and induction furnaces — is also the one with the weakest capital expenditure capacity. Under this combination, expenditures that generate no immediate revenue — raw material inspection, stockyard cover, PPE replacement — are readily deferred under competitive pressure. These accidents therefore look less like isolated incidents of bad luck, and more like a predictable by-product of the expansion cycle itself.

JSW Steel’s consolidated crude steel production rose 3% year on year to 2.402 million tonnes in July 2026, while output from its Indian operations increased 4% to 2.339 million tonnes. Capacity utilisation at its Indian operations stood at 87%. The company said the upgraded Blast Furnace No. 3 at its Vijayanagar plant, restarted on June 23, was operating at more than 80% of its rated capacity.

On August 7, data from the General Administration of Customs showed that China exported 10.211 million mt of steel products in July 2026, down 199,000 mt MoM, or 1.9% MoM; cumulative exports from January to July reached 64.995 million mt, down 4.4% YoY. In July 2026, China imported 445,000 mt of steel products, up 4,000 mt MoM, or 0.8% MoM; cumulative imports from January to July were 3.14 million mt, down 10.1% YoY. Table 1: Steel Imports and Exports Data Summary, January-July Source: SMM • China's steel exports stayed elevated with fluctuations in July According to SMM's July export schedule survey, the planned HRC export volume for the month was 1.059 million mt, slightly higher than actual exports in June. SMM export order data showed that export orders for steel products declined from a high level in May. At that time, port inspections on MD and other activities were relatively strict, which slowed down the pace of some export orders. However, orders at steel mills improved slightly. Coupled with the fact that cargoes delayed due to earlier inspections were gradually shipped out in July, overall steel exports in July still delivered a relatively decent performance. Table 2: China's Total Steel Exports Source: SMM • July steel imports remained low On the import side, steel imports in July were 445,000 mt, up 4,000 mt MoM, or 0.8% MoM; cumulative imports from January to July were 3.14 million mt, down 10.1% YoY. Net exports of steel reached 61.855 million mt. Short-term Steel Export Outlook 1. Global manufacturing slid further MoM; overseas demand remained in off-season mode According to J.P. Morgan's global PMI data, the Global Manufacturing PMI for July 2026 came in at 52.1. Although it remained in expansion territory, the pace of expansion slowed for the third consecutive month. The preemptive steel stockpiling demand earlier triggered by geopolitical disruptions in Middle Eastern shipping has been fully cleared. Combined with persistently weak demand for consumer goods, property, and infrastructure among end-users in Europe and the US, global commodity and physical steel orders collectively fell into contraction territory. Alongside this, ASEAN manufacturing PMI also declined again. China's Manufacturing New Export Orders Index for July was 49.6%, down 0.5 percentage points MoM, slipping back into contraction territory. 2. Overseas steel mills have proactively controlled production; supply contraction lacks sustainability In June 2026, global crude steel production fell 0.3% YoY to 157.9 million mt. In China, as the southern rainy season and high-temperature off-season deepened, downstream steel product construction was significantly hampered. Under heavy pressure from persistently inverted profit margins, steel mills' monthly output edged down 0.8% MoM. Excluding China, production in the rest of the world declined 2.0% MoM, with performance diverging in Asia's core regions. India and Vietnam both saw flat MoM output in June; the former was supported by robust domestic infrastructure resilience, while the latter benefited from earlier concentrated stockpiling and steady operation following new capacity ramp-up. In contrast, Japan and South Korea were dragged by slowing production schedules in downstream automotive and manufacturing sectors, showing a seasonal slight correction. Notably, the Middle East and CIS regions, which had plunged deeply in May, saw marginal recovery. Meanwhile, Europe and the US collectively entered a seasonal weakening trajectory. EU production in June dropped significantly by 5.3% MoM, with Germany tumbling 9.4%; North America declined 5.9% MoM and the US also fell 4.0%. The main reasons for the pullback in Europe and the US were, on one hand, the industry's entry into the routine summer maintenance period, and on the other, the high summer electricity prices and steel scrap prices squeezing electric furnace margins, significantly dampening mills' willingness to operate. The decline in overseas production theoretically offers structural opportunities for China's exports. However, the drops in end markets like Europe and the US were more due to proactive production cuts driven by falling demand. Coupled with India and Vietnam still maintaining high output, China's exports continue to face pressure. Figure 1: Global Crude Steel Production by Region Source: SMM 3. Price advantage continued to narrow; export order-taking pressure persisted As of July 31, 2026, the HRC export offers (FOB) for India, Turkey, and the CIS stood at $515/mt, $575/mt, and $515/mt, respectively, while China's HRC export offer (FOB) was $486/mt. China's HRC offers were -$29/mt, -$89/mt, and -$29/mt lower than those other countries, respectively. China's steel export price advantage further narrowed MoM from June. Overseas markets remained in the off-season, and low-price promotions remained the main channel for those countries to ease domestic pressures. In contrast, domestic sales pressure was not evident, and prices remained relatively firm. The price spread between Chinese and overseas markets continued to narrow, and pressure on export order-taking persisted. Figure 2: HRC Offers in Major Global Markets Source: SMM 4. Export orders rebounded from a bottom in June-July; order-taking improved slightly According to SMM's latest steel mill export order schedule, the planned HRC export volume this month was 1.023 million mt, down 2.8% MoM from the actual level last month. SMM steel export order data showed that although overseas markets remained in the off-season, recent restrictions on resource exports from the Middle East (especially Iran) created a notable supply gap in semi-finished products in overseas markets, particularly in Southeast Asia. This shortfall was quickly filled by Chinese resources. On the other hand, traders took profits from spot-futures price spread operations in late July, offering lower actual prices to facilitate transactions, which led to a bottoming rebound in export order data in July. In reality, overseas demand had not yet emerged from the off-season, and a steady recovery in export order-taking still faces pressure. Figure 3: SMM Steel Export Order Volume Source: SMM 5. Anti-dumping cases related to steel increased in July In July, the number of new anti-dumping cases related to steel initiated against China increased, covering products such as steel pipes, coated steel, sections, coiled rebar, wire rod, and hot-rolled coils. Details of specific cases and affected volumes are shown in the table below: Table 3: New Anti-Dumping Cases in July Source: SMM Taking all factors into account, lower actual transaction prices stimulated some volume growth, with semi-finished products accounting for a larger share. Given that July export numbers have already been significantly elevated, SMM expects that total steel exports in August will not sustain a strong unilateral upward trend. Instead, they will move sideways in a high range, while semi-finished product exports will remain relatively high. Figure 4: Steel Exports and Forecast, 2024-2026 Source: SMM Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database models. They are for reference only and do not constitute decision-making advice. Note: This article is an original work of this official account. For requests related to reprinting, whitelisting, cooperation, etc., please contact us. Without permission, no part may be reproduced, modified, used, sold, transferred, displayed, translated, compiled, disseminated, or otherwise disclosed to any third party, nor may any third party be authorized to use it. Otherwise, once discovered, SMM will pursue legal action for infringement, including but not limited to holding the infringing party liable for breach of contract, restitution of unjust enrichment, and compensation for direct and indirect economic losses. 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India's steel market presented a mixed picture in July, with domestic consumption continuing to outpace production while exports rebounded sharply, nearly matching imports for the month. However, strong import volumes earlier in the fiscal year kept the country a net importer through April-July.

Turkey's steel product exports continued to recover in the first half of the year, supported by stronger shipments to the European Union. However, a surge in imports—particularly from Russia and the Far East—along with weaker crude steel production has intensified pressure on domestic producers, prompting the Turkish Steel Producers' Association (TÇÜD) to call for tighter oversight of the country's inward processing regime.