Nippon Steel executive sees China-driven supply glut nearing end

Published Fri, Feb 20, 2026 · 09:41 AM

[TOKYO] A top official at Japan’s biggest steelmaker said a supply glut driven by surging Chinese exports may finally be nearing an end, a shift that could pave the way for a recovery in Asian markets.

Exporters in China were increasingly struggling to generate profits from overseas sales as the regional market had become oversupplied, said Nippon Steel chief financial officer Takahiko Iwai. Shipments were also falling partly as a result of trade measures, including anti-dumping duties, applied by several nations, he said.

“They are gradually running out of places to go,” Iwai told Bloomberg News in an interview. He added that the steel market in Asia could be “nearing the bottom” and would begin to improve, without giving a time frame.

Steel mills in China, by far the world’s largest producer, have ramped up exports as a way to offset falling domestic consumption, where a longstanding property crisis has reduced once-buoyant demand. Despite a drop in the nation’s production last year, exports surged by 7.5 per cent to a record 119 million tonnes in 2025.

As shipments have grown, a wave of protectionism has led to anti-dumping restrictions on Chinese products by countries including Vietnam, South Korea and Australia. Japan itself launched an anti-dumping probe last year into some steel goods from China, as well as South Korea. The investigation into hot-dipped galvanised coil, sheet and strip was initiated following an application by Nippon Steel and three other companies.

To some extent, China has been able to circumvent trade restrictions by pursuing markets with fewer barriers, such as in the Middle East, and pushing more semi-finished products that don’t face the same controls. Meanwhile, from this year, Beijing itself has moved to tame exports by implementing a broad licensing system for a range of steel products, with effect from Jan 1.

Meanwhile, Nippon Steel is examining its financing options as a bridging loan of around two trillion yen (S$16 billion) secured to help fund the company’s acquisition of United States Steel approaches maturity in June. Iwai said the company was taking into account market conditions, including interest rates, as it considers its options.

Nippon Steel finalised its US$14.1 billion acquisition of US Steel last June, after 18 months of negotiations embroiled in American politics. As part of its expansion, the company plans to build a major new plant in the US.

The outstanding balance on the bridging loan has been reduced to around 1.3 trillion yen, Iwai said, with repayments made using funds raised through yen-denominated hybrid loans and other instruments. The company’s total interest-bearing debt doubled to 5.3 trillion yen in December 2025 from March of the same year.

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Asked about a Reuters report that the company was considering issuing as much as 500 billion yen in convertible bonds, Iwai said: “Nothing has been decided yet.” BLOOMBERG