China will push the country’s steel industry to cut output, in an attempt to ease a massive glut and restore profitability at mills.

Authorities will promote industry restructuring to reduce production, the nation’s economic planning agency said at the National People’s Congress in Beijing on Wednesday. There were no specifics given on the volumes of cuts for the steel industry, one of the sectors worst-affected by the property market downturn. The market is speculating on a potential reduction of as much as 50-million tons of output a year.

Annual production in the world’s biggest producer and consumer of the alloy has remained stubbornly above one-billion tons despite Beijing’s efforts to guide output lower by linking it to carbon emissions. A collapse in earnings at steel mills and accusations that China is dumping its surplus overseas are now forcing the government to mandate cuts.

The pledges come nearly a decade after President Xi Jinping launched his first supply-side reforms of the steel industry, following an earlier crash in domestic demand and the subsequent flooding of overseas markets.

Countries are once again taking steps to block China’s exports, which topped 110-million tons in 2024, a nine-year high, while President Donald Trump is taking a tough line on tariffs that include Chinese steel.

Lower production should also help with Beijing’s carbon targets. A study at the end of last month called for swingeing cuts to capacity if the industry is to meet its climate goals and return mills to profitability.

Prices of the steelmaking staple iron-ore fell following the announcement and releases of China’s wider annual economic targets on Wednesday, which were mostly in line with expectations and focused more on non-industrial areas of the economy. Beijing proposed 4.4-trillion yuan ($605-billion) of special local government bonds — the biggest-ever tranche.

Iron ore futures dropped 1.3% to $99.55 a ton in Singapore as of 11:16 a.m. local time, while yuan-priced futures in Dalian lost 1%. Steel contracts in Shanghai declined. In base metals, copper rose 0.5% on the London Metal Exchange, and aluminum added 0.2%.