The amount of steel China consumes itself is difficult to assess. Not only do imports and exports have to be taken into consideration, but the indirect trade in steel, embedded in products partly made of steel like machinery, cars, or white goods, needs to be included as well. Apparent steel use (ASU), an indicator developed by the World Steel Association to measure steel demand and is expressed as deliveries minus net exports, stood at nearly 835 million metric tons of finished steel products for China in 2018. True steel use (TSU), which additionally takes into account the volume of net indirect trade, and therefore comes close to the actual amount of steel products consumed in China, amounted to round 706 million metric tons of finished steel products in 2017.
The Chinese steel industry is not only dependent on the global market for sales, but also for supply of raw materials, especially iron ore. Although China domestically mines large quantities of iron ore and possesses the fourth largest reserves of iron ore in the world, its iron ore is of low quality and contains only relatively low quantities of iron. Therefore, China is heavily reliant on the global iron ore supply, being by way the largest importer of iron ore worldwide. Imports are coming mainly from Australia and Brazil, these two countries together making up more than 80 percent of total iron ore imports to China. In recent years, recycling has played a growing part in steelmaking in China, as the Chinese government has tried to increase the recycling rate of steel scrap. Although still low compared to other countries, the recycling rate of steel scrap used in crude steel production reached nearly 22 percent in 2019 and will further increase in the coming years.
Faced with overcapacities in domestic and global markets, the steel industry in China is going through a phase of thorough restructuring. A prime example of this restructuring process is the merger of Baosteel Group and Wuhan Iron and Steel in 2016, forming China Baowu Steel Group. It is the largest steel producer in China and only second to ArcelorMittal in the world. In May 2019, Baowu Group obtained a controlling stake in the listed entity of Maanshan Iron and Steel, which brought Baowu close to its goal of becoming a steel giant with more than 100 million metric tons of annual output volume. Although many steel enterprises in China are state-owned, like Baowu, having only parts of their companies listed on the stock exchange, there are also many private steelmakers in China, the largest being Shagang Group from Jiangsu province.