Steel’s transformation 共建绿色钢铁供应链  | China report

• Australia and China form the largest raw material partnership in the global steel market
• That market is set to change: clean iron demand is not expected to scale until the 2040s but first movers could bring it forward
• China is progressing on clean steel, but this is uneven across provinces
• Working together could cut Australia’s clean iron costs by 20%

Traditional steel production will inevitably shift to clean production. When it does, the world’s largest raw material trade will be redrawn: China buys close to half of every steelmaking input traded worldwide, and most of its iron ore comes from Australia. Deep decarbonisation will require clean iron, but the shape of that market is still unsettled, and industry does not expect demand to scale until the 2040s. Both Australian and Chinese governments have made decarbonising steel a priority. But co-operation so far has been about principles, not projects.

This report sets out to answer the question on where clean iron trade happens. Where would trade make commercial sense, and what could each country gain?

The analysis finds an opportunity that is real, but not automatic. China’s progress is fast and uneven five hydrogen DRI projects have passed final investment decision, but its best renewables sit inland while steel demand sits on the coast, creating three distinct provincial roles. Australia has a globally significant pipeline and over $8 billion in announced incentives, but none has reached final investment decision, and its production costs still sit above China’s cheapest provinces. Closing that gap depends on the two countries working together for reciprocal benefit.

Australia and China have every reason to move together.

Download the report for the full analysis of provincial archetypes, project economics, cost-reduction pathways and what it would take to get a first project moving.

Steel’s transformation | China report 2026 | English download

共建绿色钢铁供应链 | China report 2026 | Chinese download