China’s steel mills are redirecting export flows to the Middle East as traditional markets tighten, with Saudi Arabia emerging as the standout buyer in 2025. Shipments to the kingdom were up 41 percent in the first nine months, while overall steel exports reached 97.76 million tonnes in the first 10 months, putting China on course for another annual record.
The rerouting follows new or expanded curbs in parts of East Asia and continuing probes elsewhere, yet demand from Southeast Asia and the Gulf has absorbed volumes. Vietnam and South Korea remained major destinations, but volumes fell after recent restrictions. The pattern signals a commercial response to policy headwinds, not a retreat from global markets.
Trade curbs redirect tonnages
As anti dumping actions proliferate and the EU readies carbon border charges, mills are shifting both geography and product mix toward markets building large energy and infrastructure assets. “Chinese steel export routes are shifting toward the Middle East and Africa,” said Jing Zhang of Wood Mackenzie, noting that exports of tubes and long products have led the change.
Exports of semi finished material have also risen, giving buyers flexibility to roll to local specifications. The focus is pragmatic, pairing low capital intensity at home with projects abroad that consume rebar, sections, and pipe.
Saudi projects absorb long products
On the demand side, Riyadh’s industrial agenda is lifting baseline consumption beyond earlier forecasts, with officials now projecting domestic steel demand of 24 million tonnes by 2035. That upward revision follows stronger than expected use in 2024 and a shift toward higher value flat products tied to renewables and manufacturing.
The market still shows gaps, particularly in sheet and plate, which Saudi policymakers are trying to localize through targeted investment and scrap system reforms. Such measures can complement imports rather than displace them in the near term, especially while mega project delivery schedules evolve. The kingdom’s need for long products and pipe remains material.
CBAM shapes flows
Europe’s fiscal phase of the Carbon Border Adjustment Mechanism will begin on 1 January 2026, a milestone that will reprice higher carbon steel at the border and could steer more Chinese tonnes toward tariff neutral markets. The Commission’s confirmation removes timing ambiguity for importers and exporters alike, even as administrative details continue to be refined.
The global context matters, since China’s steel exports reached 110.72 million tonnes in 2024, and 2025 volumes are again tracking high despite curbs. For capacity holders, the goal is to stay agile on destination and product mix. “We already have the capacity to export 10 million tons annually,” said Baosteel general manager Baojun Liu, underscoring the supply side’s flexibility.
Implications for project delivery
For builders and state clients across the Gulf, the immediate benefit is supply depth for long products, line pipe, and selective flats, which can compress bid prices and mitigate schedule risk. Procurement strategies that bundle semi finished supply with local rolling or finishing should find cost leverage while preserving standards.
Conversely, importers into the EU will need to price CBAM certificates into delivered cost from 2026, which raises the premium on lower emission routes and verified data. The opportunity for Middle East buyers is to secure term contracts while the window remains favourable. If global curbs tighten further, today’s flexible flows could harden into corridors, reshaping who supplies what to which projects.