China is rolling out an expanded steel export licensing regime as it seeks to rein in record shipments that have already heightened trade frictions across global markets. According to the Ministry of Commerce, the new rules will take effect on January 1.

Under the changes, exporters will be required to obtain licenses for a broad range of steel products. While export licensing is not a new concept in China, the latest version significantly widens its scope, covering around 300 specific product categories used in the automotive, construction, and consumer goods industries.

Beijing has offered no official explanation for the tougher stance, but market participants see the move as an effort to bring greater discipline to trade flows. Thomas Gutierrez, an analyst at Kallanish Commodities, believes the expanded regime is primarily aimed at curbing value-added tax evasion, a practice that has helped Chinese suppliers keep prices low and remain competitive overseas. In his view, the measure amounts to an administrative adjustment that is likely to weigh more on market sentiment in the near term than on actual export volumes.

Meanwhile, Chinese steel exports are heading for a historic high. Shipments for the first 11 months of the year have already exceeded 100 million tons. Slowing domestic demand has pushed producers to look increasingly to foreign markets, contributing to China’s record trade surplus, which has surpassed $1 trillion for the first time.

The new rules differ from export controls applied to so-called dual-use goods, such as rare earths. Nevertheless, steel exporters will now have to submit formal contracts and quality certificates to secure approval from the Ministry of Commerce. This signals that the era of “fast and cheap” exports is gradually giving way to tighter, more formalized oversight.