The world's largest steelmaker, which produced more than one billion tonnes in 2024, said in an official report that in 2025 it would "promote restructuring of the steel industry through output reduction".

The report by the National Development and Reform Commission (NDRC), the country's economic planning body, did not provide figures for the planned reduction.

"We will introduce policies and measures for resolving structural problems in key industries and end the phenomenon of 'rat-race' competition through industrial regulation and upgrading," it added.

The sector has been under pressure due to a prolonged slump in China's real estate market, traditionally a major steel consumer, that has hit domestic demand.

In February, a study by the Finland-based Centre for Research on Energy and Clean Air (CREA) released said China needs to slash its steelmaking capacity by 15 percent in 2025 to meet its carbon emissions targets.

Despite plummeting profits at steel mills, production fell just 1.7 percent last year and exports hit 111 million tonnes, a nine-year high, fuelling frictions with China's trade partners.

Several countries have placed tariffs on Chinese steel exports in recent months.

In February, US President Donald Trump said he would impose 25 percent tariffs on all steel imports into the United States, including those from China, from March 12.

Vietnam and South Korea, the largest importers of Chinese steel, also both announced levies that month.

South Korea imposed tariffs up to 38 percent on Chinese steel plate imports after conducting an anti-dumping investigation, while Vietnam said it would implement an anti-dumping levy of up to 27.83 percent from March 7.

India's steel minister said the country could impose tariffs in the next six months because of the "serious challenge" China's cheap imports posed to domestic producers.