At the Alacero Summit 2025, John Lichtenstein, Managing Partner at World Steel Dynamics, delivered a compelling assessment of China’s expanding global footprint in steel and steel-intensive manufacturing, underlining the rapidly growing challenge posed by indirect steel exports.
In his presentation, Lichtenstein explained how China’s global indirect steel exports — steel embedded in manufactured goods — have exceeded direct steel exports since 2017. Following the pandemic, these exports increased sharply and have continued to accelerate in recent years, driven in particular by China’s surge in automotive exports.
A key structural shift highlighted during the speech is the evolution of China’s indirect steel exports from lower-value general metal products towards higher-value automotive and mechanical machinery products. Automotive-related indirect steel exports alone are estimated to reach up to 25% of total indirect steel exports in 2025, significantly increasing competitive pressure on steel-consuming industries worldwide.
Lichtenstein stressed that the scale and pace of growth in China’s indirect steel exports represent a major and expanding threat to steel industries and downstream manufacturing ecosystems. He called for continuous and structured monitoring of indirect steel imports, not only by product type but also by their role in local supply chains.
This includes understanding whether imports consist of components, final products or productive capital assets, how they integrate into domestic manufacturing chains, who owns the importing entities, and whether the output is destined for domestic markets or re-exported.
The presentation also highlighted the importance of closely assessing Chinese foreign direct investment (FDI). While some investments may support industrial development, others can weaken domestic steel-consuming value chains if not aligned with long-term industrial strategies.
Lichtenstein concluded by urging governments to ensure that incentives for foreign investment go beyond headline indicators such as total investment value or employment creation. These criteria, he argued, must be applied alongside a clear strategy to strengthen domestic manufacturing supply chains, including those reliant on steel.
The full intervention by John Lichtenstein is available on YouTube:
