China's Ministry of Commerce and Customs announced on December 12 that an export licensing system for most steel products will begin on January 1, 2026. This confirmation immediately caused short-term volatility in the export market.

Many Chinese steel exporters paused issuing quotes last Friday afternoon, pending clarification on the new regulations. The market expects the rules to raise export prices, particularly for non-VAT-compliant steel. However, traders foresee potential downward pressure on rebar futures, which could offset some price hikes.

The rules cover about 300 steel categories, including pig iron, scrap, billet, hot-rolled and cold-rolled steel plate, rebar, wire rod, stainless steel plates, pipe and tube, and so on. Exporters worry because they only have two weeks to prepare before the new rules take effect, and the rule may delay shipments in January, though the licenses do not restrict export volume.