Under the Weight of Tariffs: Who Will Emerge as the Stainless Steel Market's Ultimate Winner?

9th June 2025 Industry Insight by DONG-YU STAINLESS STEEL ENTERPRISE CO., LTD.

As trade pressures mount and global demand softens, the stainless steel industry finds itself standing at a critical inflection point. The latest development? A strategic production cut by one of the world's largest players, Indonesia's Tsingshan Industrial Park.

1.      Tsingshan's Reduction: A Signal, Not a Stumble 

In response to prolonged market saturation and subdued global demand, Tsingshan has announced a significant reduction in output:

A.    200 series stainless: 50,000-ton cut

B.     300 series stainless: Monthly production scaled back from 420,000 tons to between 360,000-370,000 tons

C.     Indonesia Yongwang (a Tsingshan affiliate): Entered a 2.5-month production halt since May, with actual May output falling below 50% of normal levels

The focus of the reduction centers on cold-rolling lines, while upstream operations remain stable. This move is not a retreat, it is a calculated shift aimed at regaining pricing control amid a saturated global landscape.

2.      Demand Compression: Southeast Asia and Taiwan Under Pressure 

With weakening demand across Europe and Asia, Tsingshan has struggled to sustain sales volumes. While efforts were made to retain procurement volumes from clients in Taiwan and Southeast Asia, sluggish end-user demand muted those efforts.

Since late 2024, shifts in pricing strategies and supply chain dynamics have driven some Taiwanese and Southeast Asian buyers toward alternative suppliers in mainland China, further intensifying competitive pressures.

Analysts note this round of production cuts was no longer optional, it was a market-imposed necessity. Whether deeper cuts will follow depends on downstream recovery.

3.      Ripple Effects: Taiwan's Dilemma

Mainland China's and Indonesia's production pullbacks have triggered speculation over how Taiwan's mills will respond. Internal discussions within local plants have begun, though formal reductions have yet to be announced.

Order volumes have fallen significantly since Q1 2025, with utilization rates in some mills reportedly dropping to 40–50%. The dilemma is growing: resist and risk overcapacity losses, or reduce output and gamble on price support.

4.      June: The Decisive Month for Market Rebalancing 

As the June pricing window opens, Taiwan's ability to secure orders will be pivotal in determining price direction. Two major forces are shaping the landscape:

A.    Fierce supply-demand warfare: Sellers are narrowing their focus, using precision pricing strategies to win scarce orders within tight margins. Speed, service, and downstream processing support are now critical differentiators.

B.     Inventory pressure meets currency headwinds: The NT dollar's appreciation has eroded margins, and months of high inventory levels are forcing mills to adopt leaner strategies, smaller batch shipments, bundled processing, and value-added incentives.

Post-Dragon Boat Festival, stainless steel prices remain under downward pressure. The June pricing strategy is expected to act as a litmus test, revealing how mills handle three intertwined challenges:

1.      Low-cost imports vs. local cost lines

2.      Speed of urgent order execution vs. value-added service depth 

3.      Navigating global trade protectionism vs. sustaining regional market share

Conclusion: The Industry's Next Chapter: From Price War to Value Evolution Tsingshan's move is more than a response to weak demand, it reflects a deeper shift in global industrial confidence. From China to Southeast Asia, production cuts are becoming the norm, not the exception. The industry is undergoing self-correction, yet the destination remains uncertain.

For Taiwan's stainless sector, the road ahead will demand more than reactive tactics. True resilience may lie not in chasing low prices, but in elevating service systems, upgrading product value, and reinforcing regional collaboration.

The question isn't who can sell the cheapest, it's who can survive the longest without losing value.

📌 At DONG-YU STAINLESS STEEL, we believe sustainable strategy means more than reacting to cycles. We help our partners adapt, upgrade, and stay ahead. For insights, collaboration, or partnership opportunities, feel free to connect.