[SMM Analysis] Demand Surge! Boosting China's 2025 Annual Export Volume of Electrical Steel to Exceed 700,000 mt

I. Shift in Supply-Demand Structure: China Transitions from Net Importer to Net Exporter of Grain-Oriented Electrical Steel

In recent years, China's capacity for grain-oriented electrical steel has been expanding continuously. In the first half of 2025, TISCO put 80,000 mt of high-permeability grain-oriented electrical steel into production, and the 100,000 mt production line for high-permeability grain-oriented electrical steel at Hunan Valin Steel also came into use, filling domestic demand gaps. Consequently, Chinese enterprises have turned their attention overseas, recognizing the sustained growth in demand for transformers abroad. They have actively collaborated with foreign governments and enterprises, leading to a rapid increase in exports. Meanwhile, overseas steel mills have keenly captured the rapid growth in demand for grain-oriented electrical steel. In 2024, JSW Steel and JFE Steel established a joint venture, JSW JFE Electrical Steel Private Limited, in India, and further invested approximately 120 billion yen to expand production. Upon completion of the expansion, JFE Steel's total grain-oriented steel capacity in India will reach 350,000 mt/year.

Source: General Administration of Customs

II. Imports of Grain-Oriented Electrical Steel: Total Import Volume Shrinks, with Russian HiB Grain-Oriented Electrical Steel Flooding into China Due to Price Advantages

1. From the perspective of total import volume

In recent years, China's annual import volume of grain-oriented electrical steel has been relatively stable, generally ranging from 70,000 to 90,000 mt/year. However, in 2023, the total import volume reached 161,600 mt, marking a significant increase in imports of grain-oriented electrical steel. This was primarily due to the domestic "Plan for Improving Transformer Energy Efficiency," which required that over 75% of newly added transformers in 2023 be high-efficiency ones, driving up demand for HiB grain-oriented electrical steel. However, domestic HiB grain-oriented electrical steel technology only achieved breakthroughs in 2023 (such as Ansteel's 0.27mm HiB grain-oriented electrical steel passing State Grid certification), and there was a lag in the actual release of production capacity. After the release of high-end production capacity for grain-oriented electrical steel in 2024, import volumes returned to a reasonable range, with a total of 72,800 mt imported in 2024, down 54.9% YoY.

In the first six months of 2025, the import volume of grain-oriented electrical steel was 47,100 mt, representing a 31.2% increase YoY compared to 2024. Russian resources, with their relatively high cost-effectiveness, continued to stimulate Chinese traders to purchase, and imports for the whole year of 2025 are expected to exceed 90,000 mt.

Source: General Administration of Customs

2. From the perspective of import sources

In 2025, China's main import sources for grain-oriented electrical steel were Russia, Malaysia, Taiwan, China, Thailand, etc., with relatively concentrated import sources. Compared to the same period in 2024, Russia and Thailand maintained high growth rates, increasing by 216% and 108%, respectively.

Since July 2022, China has continued to impose anti-dumping duties ranging from 37.3% to 46.3% on grain-oriented electrical steel from Japan, South Korea, and the EU, while Russia has not been included in the anti-dumping scope. Coupled with lower transportation costs, Russia has become a major alternative import source.

Data Source: General Administration of Customs

III. Exports of Grain-Oriented Electrical Steel: Replacement Demand for Transformers in Europe and the US Surges, Total Exports Continue to Rise

1. In terms of total exports

China's grain-oriented electrical steel exports have continued to increase, with 494,800 mt exported in 2023 and 666,300 mt in 2024, up 34.7% YoY, showing a significant increase in export volume. The reasons for the significant increase in exports are as follows:

▶ The production capacity and output of high magnetic induction grain-oriented electrical steel (HiB) in China have been released, meeting domestic demand while also being capable of supplying foreign markets.

▶ Private producers have upgraded their high-end capacity through technological improvements, capturing emerging markets such as India (which has taken over some of China's ultra-high voltage equipment production capacity) and Mexico, using a strategy of "low prices + fast delivery."

▶ The US CHIPS and Science Act restricts direct exports of Chinese power equipment but allows indirect supply of parts. China's grain-oriented electrical steel enters the North American market via assembly in third countries like Mexico and Vietnam.

▶ The EU's Green Deal requires all inefficient transformers to be replaced by 2030, and the US Grid Resilience Act subsidizes local grid upgrades. This surge in transformer replacement demand in Europe and the US, with actual order cycles exceeding two years, is driving China's high-end grain-oriented electrical steel exports to these regions.

From January to June 2025, the export volume of grain-oriented electrical steel was 393,200 mt, up 16.0% YoY compared to 2024. With the acceleration of new energy infrastructure, China's total exports for 2025 are expected to further increase, potentially exceeding 700,000 mt.

Data Source: General Administration of Customs

2. In terms of export destinations

In 2025, the main export destinations for China's grain-oriented electrical steel were India, Mexico, Turkey, Italy, UAE, South Korea, and Brazil, with a relatively dispersed and broad distribution. Most destinations showed a growing trend, with the highest growth rates in Mexico, Italy, and Vietnam, increasing by 71.8%, 61.9%, and 57.6%, respectively.

The US CHIPS and Science Act restricts direct exports of Chinese power equipment but allows indirect supply of parts. China's grain-oriented electrical steel enters the North American market via assembly in third countries like Mexico and Vietnam.

Data Source: General Administration of Customs

IV. Global New Energy Infrastructure Accelerates, Expected to Exceed 700,000 mt in 2025

The significant increase in grain-oriented electrical steel exports in 2024 was the result of domestic capacity release, international demand surge, product structure upgrade, and policy coordination. In 2025, Baosteel's ultra-high-grade silicon steel project and Angang's HiB grain-oriented electrical steel are expected to come into operation, making domestic supply more abundant. Coupled with the acceleration of global new energy infrastructure, it is anticipated that the total exports will exceed 700,000 mt in 2025, and China's share in the global trade of grain-oriented electrical steel is expected to further increase.

Data Source Statement: Apart from publicly available information, other data is processed by SMM based on public information, market exchanges, and SMM's internal database model. It is for reference only and does not constitute decision-making advice.

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