Author: tanya

2025 Crude Steel Output at a Fifteen-Year Low

Russia produced roughly 67.8 million tonnes of crude steel in 2025, down about 4.5% year on year, according to worldsteel (worldsteel; TASS). Russian Minister of Industry and Trade Anton Alikhanov told the State Duma the decline was 4.6%, with finished rolled products falling 5.2% and pipes dropping 13.9%. Output has fallen to its lowest level in fifteen years (The Moscow Times), the industry’s deepest downturn since the early 2000s.

By process route, Russia remains dominated by the blast furnace and basic oxygen furnace long route: BOF steel accounts for about 64.9%, electric arc furnace steel for 33.0%, with other routes making up the remainder (worldsteel World Steel in Figures). That mix keeps the industry highly sensitive to iron ore, coking coal and blast furnace utilisation, and ties both its cost curve and its decarbonisation path to long-process steelmaking. It also means taphole practice, refractory life and cast house consumables carry a large share of the operating risk, the same pressures we track in the shift in cast house tooling demand as the EAF share rises and in the outlook for blast furnace taphole drilling tools.

How the Major Producers Are Coping

The Russian steel sector is highly concentrated, and the condition of a handful of majors is essentially the condition of the whole industry.

Severstal (MOEX: CHMF) is one of Russia’s most integrated steelmakers. Its core asset is the Cherepovets Iron and Steel Works in Vologda Oblast, supported by the Olenegorsk, Karelsky Okatysh and Yakilevsky mining operations and the Izhorsky Pipe Plant (Severstal annual report 2025). The company published its integrated report for 2025, but Q1 2026 results showed metal sales of about 2.626 million tonnes, down only 1% year on year, while revenue fell about 19% and net debt stood at roughly RUB 62 billion – a clear picture of stable volume and falling price, with exports sold at a discount (Severstal Q1 2026 results).

Magnitogorsk Iron and Steel Works (MMK), founded in 1932 in Chelyabinsk Oblast, is a flagship Soviet-era plant controlled by the Rashnikov family, producing plate, sections and metal goods for the Ural and Siberian engineering, automotive and construction sectors (baike.com). Novolipetsk Steel (NLMK) in Lipetsk is one of Russia’s largest producers of flat-rolled and tin-plated products. Together with Nizhny Tagil Iron and Steel Works, part of the Ural Mining and Metallurgical Company, and a few others, these firms account for the bulk of Russian crude steel.

The majors face three shared pressures: weak domestic construction and engineering demand, high interest rates depressing downstream investment, and the need to find new buyers at a discount after losing European markets.

Sanctions and the Reset of Export Markets

Since 2022, Russian steel has largely lost access to the EU, UK, US, Canada and Japan. Producers have redirected shipments to Turkey, China, India and CIS countries, yet analysts estimate Russian steel exports by volume still fell by roughly one third, or about 10 million tonnes, between 2021 and 2024 (Asian Metal). The new markets have distinct features.

• China: Russian exports of semi-finished steel to China have risen sharply, using discounted pricing to gain share.
• India: India is becoming a major destination. After the December 2025 visit to India, the two countries set a target to raise bilateral trade from USD 68.7 billion in 2025 to USD 100 billion by 2030, with steel a pillar beyond energy.
• Turkey and the Middle East: amid Black Sea shipping security risks, Russian billet producers began in the second half of 2026 to avoid routes across the Black Sea, while Turkish buyers shifted to Chinese and Indian material, further eroding Russia’s bargaining position (Kommersant).

One analysis puts it bluntly: the surge in Russian steel exports is largely forced by weak domestic demand and sustained through dumping, rather than by genuine competitiveness (Re:Russia). For buyers in third markets, that discount is real but conditional – it depends on trade measures staying where they are, and on the routes that carry it remaining open, both of which we covered in what the 2026 trade rules mean for plant buyers.

Domestic Market and What Comes Next

At home, Russia has pushed import substitution: since 2015 the government has run an import-substitution commission offering tax and policy support for machine tools, oil and gas equipment, automobiles and agricultural machinery. Steelmakers have been asked to prioritise domestic orders for oil and gas pipes, energy equipment, railways and defence. That is one reason pipe output fell 13.9% in 2025 – the rhythm of oil and gas investment and pipeline projects shows up directly in pipe orders.

Looking ahead, Russian steel is likely to follow this path:

1. Little rebound in output: weak residential and construction demand and high rates, with no quick return to European markets.
2. Exports continue east and south: China, India, the Middle East and the CIS remain the main outlets, but discounted pricing caps margins.
3. Divergence among majors: integrated producers with their own mines, closer to eastern ports and able to make high-value flat-rolled and tubular products such as Severstal and NLMK will cope better; mills dependent on domestic construction and long products face more pressure.
4. Constrained technology refresh: Western metallurgy equipment, online inspection, environmental technology and refractories are restricted, slowing relines and upgrades of blast furnaces, casters and rolling mills, and affecting the product mix over the longer term. Slower relines change consumable demand patterns as much as they change capacity, which is why the planning side matters as much as the equipment side – see consumable planning around a reline and blast furnace life extension economics.

Conclusion

Russian steel today sits in a classic bind: old markets lost, new markets low-margin, domestic demand soft, and equipment renewal slowed. At 67.8 million tonnes, Russia still ranks among the world’s top five steel producers, yet the industry has been forced to shift from a premium European flat-rolled exporter to a seller of discounted semi-finished and long products under an import-substitution model.

For Chinese steel and metallurgical-equipment makers, this means both an opening for equipment, refractories and spare parts under Russia’s import-substitution push, and direct competition with Russian steel in third-country markets. For everyone else buying tooling and consumables into these markets, the practical questions are the same as anywhere else: where the supply comes from, what it costs landed, and when it arrives – the market backdrop is set out in our Q4 2026 steel market analysis, and the ordering calendar in our Q1 2027 cast house budget guide.

Budget season for the first quarter of 2027 lands on top of a market that has stopped helping. Global steel demand is flat in 2026 at 1,722 Mt, with only 1.7% growth expected in 2027, and almost the whole of the downgrade belongs to China. Iron ore is trading near 90 USD per tonne. When price cannot carry the margin, the cast house becomes a cost conversation, and the cast house budget becomes a document that has to defend itself.

Most of these budgets are built the lazy way: last year’s consumable spend with an inflation adjustment on top. That number hides everything that matters. It does not say whether the plant drilled more holes, paid more per hole, or bought a worse tool at a better price. A cast house budget built on tap count does.

Build the line on tap count, not on last year’s invoice

The arithmetic starts with how often the furnace is tapped. Multiply taps per day by the number of furnaces by operating days and you have the only volume figure the consumables budget really needs. A two furnace shop tapping eight times a day per furnace, 350 days a year, is running about 5,600 taps. Every consumable line can then be expressed per tap instead of per year, and that is the version that can be compared with another site, another furnace or another supplier.

Then take your own consumption rate: bits per tap, rods per tap, sleeves per thousand taps. Most cast houses know those numbers within ten per cent once somebody counts for a fortnight. Multiply rate by tap count by unit cost and the budget builds itself. Where the answer looks wrong, the fault is usually in the rate, not in the price.

Split the budget into drivers you can actually manage

• Bits: consumption per tap, driven by clay hardness, taphole temperature and wing or button geometry. This is the line most exposed to specification drift – see the four wear parts that decide cast house drilling cost.
• Rods: wear shows at the thread end and at the shank. A rod that fails early is a bit that never gets used.
• Sleeves, adapters and shanks: the cheapest items in the budget and the most common reason a crew stands still.
• Reconditioning and grinding: cost per re-dressed tool compared with cost per new tool, which is not the same as comparing prices.
• Freight, duty and currency: on flat product, eight per cent of landed cost is the entire negotiation, and the 2026 trade measures made that worse – see what the trade rules mean for plant buyers.
• Buffer stock: the carrying cost of holding six to eight weeks of rods is the cheapest insurance line in the whole document.

Put the 2027 calendar inside the plan

Chinese New Year falls on Saturday 6 February 2027, eleven days earlier than in 2026. That is not just a holiday date. Chinese factories typically start winding down two to four weeks before the new year, the official public holiday runs through the first half of February, and production returns progressively through late February and March rather than at full capacity on the first working day. Freight space tightens and rates climb in the run-up as everyone tries to ship before the break.

The practical consequence for a Q1 budget is that an order intended to be on the rack before the holiday needs to be placed in late November, not January. If part of the Q1 programme comes from Chinese supply, and for many cast houses it does, then the purchase order date is a budget line and not an administrative detail. Lead time is a cost, and the first quarter of 2027 concentrates it.

Three numbers that belong in the budget notes

• Cost per hole: the only figure that compares fairly between suppliers, and the one that converts a price argument into an engineering one. The method is set out in consumable volume arithmetic for a cast house.
• Days of cover: stock on hand divided by daily consumption. Anything below four weeks going into February is an exposure, and two weeks is a gamble.
• Minutes per taphole: the crew time a tool consumes. A bit that saves eight per cent on price and adds two minutes to every tap has cost the plant money.

A structure you can copy

• Line 1: annual tap count, by furnace, with the days lost to relines and planned stops already deducted.
• Line 2: consumption per tap for each item – bits, rods, sleeves, adapters – based on measured rate, not on catalogue claims.
• Line 3: unit cost by specification, so that R32 left-hand connections, diameters and carbide grades are priced separately rather than averaged.
• Line 4: landed cost adder for freight, duty and exchange rate, kept visible instead of folded into unit price.
• Line 5: buffer stock target and its carrying cost, expressed in days of cover.
• Line 6: contingency of five to eight per cent, and a quarterly review date with a named owner.

What would change the plan mid-quarter

• Demand quietly improving: demand outside China grows 1.5% in 2026 and is forecast to accelerate to 4.0% in 2027, with India expected to consume 172.4 Mt in 2026 and 186.2 Mt in 2027.
• Europe restocking: EU apparent steel use is forecast to fall 0.3% in 2026 and rebound 3.1% in 2027. A restocking quarter changes how urgent maintenance becomes.
• Quota exhaustion: with the EU tariff-free import volume cut to 18.3 Mt a year and divided by quarter, a single product category can fill up inside a month.
• Reline decisions: choosing to extend a campaign rather than rebuild one moves consumable demand forward by quarters, as covered in blast furnace life extension economics.
• Ore and margin: iron ore near 90 USD per tonne keeps the cost floor low. A sustained rally would squeeze exactly the maintenance budget this exercise is protecting.

None of this requires a new system. It requires the budget to be built from holes rather than invoices, to have the February closure already in the calendar, and to keep three measured numbers visible all year: cost per hole, days of cover and minutes per taphole. The market backdrop those numbers sit inside is set out in our Q4 2026 steel market analysis, and the ordering side of it in consumable planning around a reline.

This steel market analysis is aimed at the people who buy the wear parts rather than the coils. If you run a cast house, the numbers that decide your next budget are not the headline price of hot rolled coil. They are the ones that settle whether the maintenance line gets squeezed when mill margins tighten – and the fourth quarter of 2026 has tightened them.

The October 2026 short range outlook from worldsteel splits the difference between collapse and recovery. Global steel demand is now expected to be flat in 2026 at 1,722 Mt, with growth of only 1.7% to 1,752 Mt arriving in 2027. Both years were revised down, and almost the whole revision is China. Chinese demand is now forecast to contract by 2.0% in 2026, while demand outside China still grows 1.5% this year and 4.0% next year. Developing economies excluding China are put at 1.9% growth in 2026 and 5.1% in 2027, once Middle East demand recovers from the conflict that reversed one of the strongest growth stories in the market.

What the Q4 numbers actually say

Output tells the same story as demand. World crude steel production in August 2026 was 144.2 Mt, down 1.2% year on year. China produced 74.6 Mt, down 3.7% on August 2025. India produced 14.8 Mt, up 4.6%. Viet Nam was up 36.4% on a small base, the United States rose 3.0% with utilisation back around 80%, and North America as a whole added 3.9%. Against that, the EU 27 slipped 1.0% to 8.9 Mt, the Middle East fell 4.6% and Russia with other CIS countries and Ukraine dropped 5.6%.

Read together, those figures describe a market where volume is not coming back from the top of the table. It is coming from India, South East Asia, Africa, and from the Middle East when the conflict cycle allows. A supplier whose order book depends on one mature blast furnace market is now exposed to that arithmetic, and so is a plant that has to justify every consumable purchase against a management account that is not growing.

Cost, price and margin: the floor moved lower

Iron ore has done what it usually does in a soft market. The 62% Fe benchmark was quoted near 90.7 USD per tonne on 13 October 2026, roughly 7% lower than a month earlier and close to 14% below the same week last year, with forward views pointing to the high 80s rather than a bounce. Scrap moved the other way in Europe’s neighbourhood, where average Turkish import prices rose 28 USD per tonne in September – the normal outcome when electric furnace capacity has to compete for a limited pool of material.

Flat product has been no livelier. Chinese hot rolled coil has been trading in a 3,000 to 3,400 RMB per tonne band with export offers around 430 to 480 USD FOB. That is a cost-driven floor rather than a demand-driven one. When mills cannot push price, they defend margin on the cost line, and the cost line runs through coke rate, ore quality, yield and consumables per tonne of hot metal.

Trade rules have become a cost line of their own

The trade environment hardened on both sides of the Atlantic during 2026. The European Union’s new safeguard regime cuts tariff-free steel import volume to 18.3 Mt a year, about 47% below the 2024 quota, spreads it over 26 product categories by quarter with no carryover, and applies a 50% duty above the quota instead of the old 25%. In the United States, the Section 232 regime has kept 50% duties on steel and aluminium in place while widening the definition of a derivative article. Carbon border adjustment has entered its definitive phase, and the argument in Brussels has moved on to how far the scope should reach.

None of this stops a furnace from tapping, but it changes where spare parts can come from, how long they take to arrive and how much paperwork travels with them. That is why landed cost, not list price, is the only honest comparison for imported consumables – a point we set out in what the 2026 trade rules mean for plant buyers.

Where a flat market bites first: the maintenance line

In a year when nobody’s selling price rises, the only lever left is cost per tonne of iron, and the cast house is where a lot of it is decided. Taphole drilling consumables are a small line in the maintenance budget, but they govern whether a taphole opens on the first attempt, how much time the crew spends in front of the runner, and whether a delayed tap pushes the cast sequence into the next shift. Cheap consumables that fail early are the most expensive way to buy them, which is exactly the argument behind the four wear parts that decide cast house drilling cost.

The arithmetic is not complicated. Take the number of tapholes drilled per furnace per day, multiply by the number of furnaces, then divide the annual spend on bits and rods by that figure. What comes out is a cost per hole, and it is the only number that behaves sensibly when you change supplier. A tool that costs 20% less but drills 30% fewer holes has made the plant poorer. The same logic scales to a full year of tapping in the consumable volume arithmetic for a cast house and to the benchmarking method in cost per metre against drill bit prices.

What to do with the drill bit line before the year ends

• Switch the conversation from unit price to cost per hole, and insist that suppliers quote on that basis. It removes the argument and exposes the tools that only look cheap.
• Match the bit to the clay, not to the catalogue. A harder clay and a colder taphole change how much of the drilling is cutting and how much is impact, which is why bit design has to follow clay specification.
• Check thread and shank standards before ordering anything. A left-hand R32 connection that arrives as a right-hand thread is scrap metal with a shipping invoice, as set out in the R32 left-hand thread explainer.
• Buy the reline window forward. Relines are still being scheduled through the current margin cycle, and rods, bits and adapters ordered late cost more than they save – see consumable planning around a reline.
• Put lead time into the price. In a market stacked with trade measures, the same part can take three weeks or three months to arrive, and lead time is a real cost that never appears on the quotation.

Signals to watch into the first quarter of 2027

• Chinese output discipline: whether 2026 production controls carry into 2027, and with how much force, decides how much export volume rolls into the rest of Asia.
• Iron ore in the high 80s: a range-bound ore price keeps the floor under mill costs, but any sustained rally would squeeze exactly the maintenance budgets that are already thin.
• Quota exhaustion in Europe: with tariff-free volume cut and divided by quarter, the timing of category-level exhaustion is now a purchasing question, not a trade policy one.
• Reline and life extension announcements: the decision to extend a campaign rather than rebuild one moves consumable demand forward by quarters, as covered in blast furnace life extension economics.
• Electric furnace share: every point of share that moves to EAF changes the mix of cast house work, and with it the tooling demand described in rising EAF share and cast house tooling.

The practical conclusion for a flat market is short. Expect no help from price, expect the cost line to be audited harder, and expect the difference between a good and a poor consumable year to be decided by boring measurements – holes per bit, taps per crew, minutes per taphole. Buyers who can produce those numbers will keep their budgets. The wider view of where this demand comes from is set out in the market prospect of blast furnace taphole drilling tools, and the supply side of the same picture in the 2026 overcapacity buyer market.

The headline numbers for global steel output in 2026 are easy to read and easy to misread. World crude steel production came to roughly 1,848.9 million tonnes in 2025, and about 960.8 million tonnes of that – 52 percent – was made in China. Chinese tonnage fell 4.4 percent year on year, while India rose 10.4 percent to 164.9 million tonnes and the United States edged up 3.1 percent to 82.0 million tonnes. If you supply blast furnace consumables, the question is not whether the world made fewer tonnes. It is whether the world drilled fewer tap holes.

The 2025 numbers, and what they really say

Four figures from the World Steel Association release frame the whole conversation:

• China: 960.8 Mt, down 4.4 percent, still more than half of world output.
• India: 164.9 Mt, up 10.4 percent – the second largest producer and the fastest growing large one.
• Germany and Japan: 34.1 Mt (down 8.6 percent) and 80.7 Mt (down 4.0 percent). Mature markets are not just flat, they are contracting.
• Vietnam and Turkiye: 24.7 Mt (up 12.2 percent) and 38.1 Mt (up 3.3 percent). New capacity is being built where demand is.

The first quarter of 2026 continued the pattern, with world output drifting sideways – around 149 million tonnes a month – and regional results pulling in opposite directions. Asia and Oceania softened, while North America, the EU and Europe outside the EU all moved up.

Fewer tonnes does not mean fewer tap holes

This is where consumable demand and steel output stop moving together. A blast furnace that produces 4 million tonnes a year and a blast furnace that produces 3.4 million tonnes a year have the same tapholes, drilled the same number of times per day, with the same clay, the same rods and the same bits. Casts are set by the furnace schedule, not by the order book. A hot furnace running a tight schedule can actually burn through more taphole consumables per tonne, because each cast is drilled faster and the tools work hotter.

The tonnage cut that does matter is the one that closes a furnace. Idling or permanently shutting a blast furnace removes a whole set of tap holes from the market – and that is what has been happening in Europe and Japan. Our earlier look at the market prospects for blast furnace taphole drilling tools described the same split: shrinking tonnage in mature markets, more tap holes in growing ones.

Why consumable budgets tighten anyway

Falling tonnage still squeezes the people who buy your tools. When a mill loses margin, maintenance and consumable budgets are among the first lines to be renegotiated, and the taphole drilling account – a few thousand parts a year rather than a few hundred thousand – gets treated as easy savings. The result is a wave of enquiries built on one question: how much per piece. That is the wrong question, and it is the one that leads buyers into the three traps behind low prices.

What this means for a 2026 purchase plan

• Buy on cost per hole, not cost per piece. A bit that costs 20 percent more and drills 60 percent longer is the cheaper purchase.
• Keep two qualified suppliers. Concentrating on one low-price source is how a plant ends up with a furnace waiting on a shipment.
• Specify by drawing. Length, thread, diameter and hardness should be on paper, not inferred from a photo.
• Watch the growing markets. India, Vietnam and Turkiye are adding capacity and tap holes while Europe removes them. Tool demand follows the furnaces.

Frequently asked questions

Does lower global steel output mean lower taphole tool demand?

Not directly. Tonnage can fall while tap hole count stays flat, because drilling frequency is set by the casting schedule. Demand drops when furnaces close, not when they slow down.

Which markets are adding blast furnace capacity?

India is the clearest case, followed by South East Asia, Turkiye, the Middle East and parts of Africa, where new integrated plants are being commissioned with Chinese engineering and equipment.

If your plant is drilling more casts per day on the same tools, or your supplier list is due for review, start with the wear parts you already throw away. Send us a description of the furnace, the taphole diameter and a photo of the last failed bit, and we will tell you what the tonnage numbers do not: where your consumable budget is actually going. The full range is on our news and product pages.

A blast furnace reline is the largest maintenance event in ironmaking, and 2026 is turning into a busy year for them. U.S. Steel approved a 350 million dollar relining of blast furnace No. 14 at Gary Works, alongside a further 200 million dollars for the hot strip mill and steel shop, and restarted an idled furnace at Granite City to meet demand. Those decisions carry a message for anyone selling taphole drilling tools: the blast furnace is not being retired, it is being rebuilt for another campaign.

What a reline actually replaces

A reline is not a repair. The furnace is cooled down, the burden is removed, and the refractory lining from the hearth upward is replaced. In the hearth and around the tapholes, the work is at its most precise:

• Taphole assemblies are rebuilt, including the taphole sleeves, clay gun seating and the cooling around the iron notch.
• Hearth refractories are relaid, changing the drilling resistance your bits will meet for years.
• Cast house equipment – drills, clay guns, runners – is usually overhauled or replaced at the same time.
• Drilling tools are re-specified against the new lining, because a fresh hearth drills differently from a worn one.

Why reline projects pull consumable demand forward

Taphole rods and bits are usually bought as a steady monthly flow. A reline breaks that pattern twice. First, the commissioning team needs tools weeks before the first cast, because the drilling procedure is tested and refined during blow-in. Second, the first months after blow-in are unusually demanding: the taphole is new, the clay behaves differently, and operators tend to drill harder and more often than the steady state requires. This is when a plant discovers whether its standard bit geometry suits the rebuilt hearth – and when a supplier that can deliver a modified drawing in two weeks is worth more than one that quotes five percent less.

The technical differences are covered in more detail in our guide to how cross type drill bits work through taphole clay and lining, and in the drill rod selection guide for plants that are re-specifying after a rebuild.

Reline economics favour life extension over replacement

The reason relines are back is arithmetic. Replacing a blast furnace with a direct reduced iron and electric arc furnace route is a multi billion dollar project measured in years – Stegra’s plant in northern Sweden, at around 6.5 billion euros and 2.5 million tonnes of capacity, is the reference case. A reline is a fraction of that and buys another campaign. When capital is scarce and carbon policy is uncertain, life extension wins, and life extension keeps tap holes in service.

What procurement should prepare now

• Re-specify the tools with the new lining in mind. Diameter, tip geometry and rod stiffness should match the rebuilt hearth, not last campaign’s spare parts list.
• Build a commissioning stock. Put aside enough rods and bits for six to eight weeks of above-normal consumption.
• Fix the drilling procedure in writing. Alignment, feed rate and breakthrough practice matter most on a fresh lining – see our standard operating procedure for taphole drilling.
• Agree spares and lead times in the contract. A reline schedule tolerates no missing connector.

Frequently asked questions

Do taphole tools change after a reline?

Often the diameter stays the same while the tip geometry and rod grade change, because a new hearth is denser and less forgiving. Measure first, then order.

How long does a relined furnace run?

A well executed reline buys a full campaign – commonly 15 to 20 years of service between major rebuilds.

If a reline or a hearth repair is on your calendar, the best moment to sort out consumables is months before the blow-in. Send us the new taphole drawing and the clay specification and we will match rods, adapters and bits to it.

Ask where steel growth markets are in 2026 and the answer has changed hands. India produced 164.9 million tonnes of crude steel in 2025, up 10.4 percent, and is now the second largest producer in the world. Vietnam grew 12.2 percent to 24.7 million tonnes. Turkiye added 3.3 percent to reach 38.1 million tonnes. In the same year, Germany fell 8.6 percent and Japan 4.0 percent. For anyone selling taphole drilling tools, that is not a curiosity – it is a map of where the next tap holes are being built.

What drives capacity in the growth markets

Three forces are at work, and all three consume blast furnace consumables.

• Domestic construction and infrastructure. India and Vietnam are building roads, ports and housing faster than their existing mills can supply.
• Import substitution. Steel that used to arrive as finished product is increasingly made locally, which means new integrated plants, not rolling mills.
• Export ambition. New mills in South East Asia and the Middle East are designed with export in mind, often with Chinese engineering, Chinese equipment and Chinese operating practice.

A new integrated plant is a decade of consumable demand. Each blast furnace brings two to four tapholes, drilled several times a day, for a campaign that lasts 15 years or more before the first reline.

Why new plants buy differently

The procurement habits of a greenfield mill are not the habits of a 60 year old European works. New plants tend to:

• Specify by drawing and standard, because the equipment package came with documents, not with a parts room full of legacy spares.
• Buy whole tool kits – bits, rods, adapters and connectors together – so that responsibility for fit sits with one supplier.
• Care about lead time as much as price, because commissioning schedules are contractual.
• Prefer a partner who can scale, from a trial order to a full year of consumption without changing tooling or paperwork.

That is a different profile from a mature plant that has been buying the same part number for two decades, and it is why the custom bits and rods route matters more in these markets than in Europe.

Where the mature markets still pay

Shrinking tonnage does not mean no business. European, Japanese and North American plants still run some of the largest blast furnaces in the world, and they buy on the opposite logic: long campaigns, tight maintenance windows and a strong preference for tools that reduce downtime rather than shave unit cost. Our notes on reducing downtime in taphole drilling describe what those buyers actually ask for.

What it means for a supplier and a buyer

If you sell drilling tools, the growth markets reward a supplier with drawings, English speaking technical contact and flexible order quantities. If you buy drilling tools in a growth market, the risk is the mirror image: a fast growing plant can be talked into whichever tool is available, rather than the one its furnace needs. Start with the thread, diameter and length matching guide before you compare prices.

Frequently asked questions

Which country added the most steel capacity in 2025?

India, by a clear margin, with 15.5 million tonnes of additional output year on year. Vietnam grew fastest in percentage terms.

Do new plants need different taphole tools?

They need the same families – bits, rods, adapters – but specified to the equipment package they were built with, which is often R32 based.

Building a supplier list for a new plant or a new export market? Send us the taphole diameter, thread and drilling machine type, and we will come back with a tool kit and the drawings behind it.

For a decade, steel overcapacity has been described as a Chinese problem with European consequences. In 2026 the policy answer has changed shape, and it changes the balance of power between steel plants and their suppliers. China’s revised capacity replacement rules, issued after a suspension of new approvals that lasted nearly two years, require 1.5 tonnes of existing capacity to be retired for every tonne of new capacity – up from 1.25 – exclude long idled capacity from the calculation, restrict trading of capacity quotas between regions and companies, and explicitly support electric arc and hydrogen based steelmaking.

What the new rules do

Three changes matter to anyone selling or buying plant consumables:

• Stricter replacement. Building new capacity now costs more retired capacity than before, which slows greenfield expansion and favours upgrades in place.
• Support for EAF and hydrogen routes. The policy signals where Chinese investment is heading, with an EAF share target that has been discussed at around 15 percent of production.
• Export discipline. An export licensing system took effect on 1 January 2026, and export tax rebates for steel products are being phased down, from 6 percent toward zero by the start of 2027.

Read together, these measures are an attempt to stop surplus capacity from being exported at any price. For a European or South East Asian mill, the practical effect is a steel market that is less volatile and less distorted than it was three years ago.

Why that helps consumable buyers

Overcapacity has a second hand: it makes tooling markets competitive. When dozens of qualified workshops can machine a 42CrMo drill rod to a drawing, prices are set by process efficiency rather than scarcity, and buyers gain the ability to insist on specification. That is the correct use of the moment. The wrong use is chasing the lowest quotation and discovering afterwards that three traps sit behind low prices – under-hardened rods, undersized carbide, and threads cut to the loose end of the tolerance band.

The four questions that replace a price comparison

• What is the delivered hardness and where is it measured? A quality control checklist should name the test, not just the result.
• What is the thread tolerance? On taphole tools, a loose thread shows up as rod breakage, not as a fitting problem.
• What evidence comes with the shipment? Material certificates and inspection reports are normal, not premium.
• What is the cost per hole? Run the arithmetic from our guide to cost per metre and bit price comparison.

Where the market goes from here

If capacity discipline holds, Chinese output stays near 960 million tonnes rather than returning to a 1,000 million tonne pace, and the surplus that used to flood export markets shrinks. Tooling supply, meanwhile, stays globally competitive: the same industrial base that machines the rods can machine almost anything, and that capacity will not disappear with the surplus. Buyers who lock in a qualified supplier relationship now will be dealing from strength when the cycle turns back.

Frequently asked questions

Will Chinese steel exports fall in 2026?

The licensing system and the phase out of export rebates both point that way, though the size of the reduction is a policy variable rather than a forecast.

Does overcapacity make cheap tools safer to buy?

It makes good tools cheaper, which is not the same thing. Competition rewards buyers who specify; it punishes buyers who only compare numbers.

Reviewing your consumable suppliers this quarter? Ask us for the material certificates, the hardness range we work to and the drawings behind the part number – then compare offers on the same documents.

Trade policy has become a line item in maintenance budgets. The steel trade rules that took effect around 2026 – a Chinese export licensing system from 1 January 2026, a phase out of export tax rebates for steel products from 6 percent toward elimination at the start of 2027, and carbon border measures in Europe – all change the landed cost of what a steel plant buys, including the tools it uses at the cast house.

The three changes at a glance

• Export licensing in China. Quality standards now gate certain steel exports. The intent is to stop low grade material being dumped abroad, and the practical effect is a more predictable, better documented supply chain.
• Rebate phase out. Removing the export tax rebate removes the incentive to export marginal tonnage. Expect fewer surprise parcels and steadier pricing.
• Carbon border adjustment in Europe. Importers report embedded emissions, with the cost passed through. The administrative burden lands on whoever prepares the paperwork – which is usually the seller, not the buyer.

Consumables are not exempt

It is tempting to treat drill bits and rods as a low value category that customs rules will never touch. In practice, tooling is affected in three ways: the steel in the rod is the same 42CrMo and 40Cr bar that trade measures track; the paperwork requirements apply to the shipment regardless of value; and the freight and clearance cost is a larger share of a lighter, denser product. A container of rods and bits is heavy, packed tight, and needs proper documentation – export packing is a purchasing subject, not just a logistics one.

What a buyer should recalculate

• Landed cost, not FOB price. Freight, duty, clearance and any carbon charge belong in the comparison.
• Documentation quality. A supplier who cannot produce material certificates and consistent commercial invoices will cost you time at the border.
• Incoterm. DDP transfers customs risk to the seller and usually saves a plant more than the small premium it pays.
• Lot size. Consolidating orders reduces per shipment overhead – a real cost when clearance is measured per entry.

For a plant buying a year of consumables in two or three shipments, the arithmetic usually favours buying more per shipment and accepting a slightly longer planning horizon. The related discipline is choosing tools that last: wear forms of rods and bits and how to extend life is worth more to your budget than any tariff arbitrage.

Where manufacturing cost still favours China

Trade rules add friction, but they do not remove the structural gap. A Chinese tool maker buys its bar, its cemented carbide and its heat treatment in the same industrial cluster, machines to the customer’s drawing, and ships from ports that handle steel products daily. Those advantages survive tariff changes. What does not survive is sloppy specification: if your drawing and inspection requirements are vague, a lower price is simply a different product. Our notes on heat treatment and precision machining explain what to write down.

Frequently asked questions

Do steel tariffs apply to drill bits and rods?

They can. Tooling is classified by product code, not by its end use, so check the current schedule for your import route rather than assuming consumables are exempt.

Who pays a carbon border charge?

Formally the importer of record, which is why the compliance paperwork belongs in the supplier conversation, not only in the customs broker’s inbox.

If you are recalculating landed cost for 2026, send us your destination port and typical order size and we will quote on a landed basis, with the documents your customs broker will ask for.

The green steel transition has moved from press release to steelworks. Stegra is commissioning its plant in northern Sweden – roughly 6.5 billion euros, 2.5 million tonnes of capacity and a 700 megawatt electrolyser behind it – starting on an electric arc furnace with the direct reduction shaft to follow. Salzgitter is converting its works in stages. Thyssenkrupp has committed around 2.2 billion euros to a first phase. In Australia, public money to the tune of 2.4 billion Australian dollars is supporting the Whyalla transition from blast furnace steelmaking to direct reduction and electric arc melting.

And yet, on the same continent where those projects are being built, blast furnaces keep being relined. Both things are true, and anyone selling or buying taphole drilling tools needs to hold them together.

Why the transition does not switch off ironmaking

• Green projects are replacements, not additions. When a direct reduction and EAF route comes on line, the blast furnace it replaces is shut – but only after the new route proves it can deliver the tonnage and the grades.
• The capital is enormous and staged. A 6.5 billion euro project absorbs a decade. In the meantime every existing furnace must be kept reliable.
• Flat products still need virgin iron. Automotive and packaging steel made from scrap alone is limited by residual elements, which is why hydrogen reduced iron is the feedstock of choice and blast furnace iron is still in demand.
• Furnaces get relined rather than retired. A reline buys another campaign, and a campaign means two to four tapholes drilled several times a day.

What changes for the cast house while the transition runs

As the number of blast furnaces falls, the ones that remain carry more of the load. That has direct consequences for taphole consumables:

• More casts per day. A furnace asked to deliver more hot metal drills more often, often with shorter repair windows.
• Hotter, harder drilling. Higher hot metal rates and deeper tapholes put more heat into the rod, which is where material selection starts to matter – see our notes on materials for high temperature drill rods.
• Bigger consequence of failure. On a plant with one furnace instead of three, a stuck or broken tool is not an inconvenience, it is a lost cast.
• Tighter specification. Transition era budgets fund the new route first, so the old route has to run on better tools rather than more tools.

The direct reduction plant is a new customer, not a lost one

Direct reduction and electric arc routes tap metal too, just not through a clay taphole. Their casting and tapping equipment, ladle practices and refractory tools are a different product family, and suppliers who understand ironmaking refractories and drilling will find the conversation familiar. Meanwhile the blast furnace and ferroalloy furnaces that remain need precisely what they always needed: cross bits, button bits, rods, adapters and connectors that match the drilling machine and the clay.

If your plant is still on the blast furnace route, this is the moment to protect the asset rather than postpone maintenance. That is why the fundamentals in wear forms and life extension for rods and bits are worth more than ever: a plant that cannot afford a new furnace certainly cannot afford a damaged hearth.

Frequently asked questions

When will blast furnace taphole drilling disappear?

Not on any schedule that affects a purchasing decision being made in 2026. The world still makes the large majority of its steel through the blast furnace and basic oxygen route, and every replacement project is measured in years.

Should a steel plant stop investing in taphole tooling?

No. The taphole is a safety and productivity boundary. Preserving it protects a campaign that still has to deliver while the transition is funded.

Running a furnace through a transition programme? Tell us the taphole diameter, the clay you use and the drilling machine, and we will match a tool set that keeps the cast schedule honest.

Every forecast for the steel industry now includes a rising EAF share, and the numbers are moving in that direction. Market research published in early 2026 values the global electric arc furnace equipment market at around 1.1 billion dollars by 2030, growing at roughly 5.6 percent a year. In China, where output still runs above 960 million tonnes a year, policy explicitly favours electric and hydrogen based steelmaking, with an EAF share target that has been discussed at around 15 percent of production.

For a cast house, the interesting question is not the percentage. It is what changes, and what does not, when a mill shifts from iron ore in a blast furnace toward scrap in an arc furnace.

Two tapping systems, two tool families

A blast furnace taps molten iron through a clay sealed hole that is opened with a drill – a machine, a rod, an adapter and a bit, working a few metres into refractory and clay. An electric arc furnace taps through an eccentric bottom tapping hole or a tapping spout, using oxygen lances, tapping tools and refractory practice rather than clay drilling.

They are not the same consumable category, and neither replaces the other:

• Blast furnace and ferroalloy furnaces need taphole drills, rods, cross and button bits, and the connectors between them.
• Electric arc shops need tapping and slag door tooling, lances, and ladle and refractory consumables.
• Direct reduction plants need materials handling, refractory and tapping equipment, with a growing interest in the same high temperature tooling logic.

Why the blast furnace fleet gets busier, not quieter

Here is the part of the transition that gets lost in the headline percentage. Steel demand is not falling fast enough for electric steelmaking to absorb the difference. Scrap supply is finite, and residual elements such as copper and tin limit how much scrap can go into demanding flat products. The result is a fleet of blast furnaces that is smaller but works harder: fewer furnaces, each pushed to higher productivity, each drilling its tapholes more often, each running in a plant where downtime is more expensive than it used to be.

That is a favourable backdrop for tool life and specification, and an unfavourable one for false economies. When a plant runs two furnaces instead of four, downtime reduction in taphole drilling stops being a maintenance slogan and becomes the operating plan. The practical levers – correct bit geometry, matched rod length, clean threads, controlled feed – are in our standard operating procedure for taphole drilling.

What a buyer should do with this

• Keep the two categories separate in your stores. Mixing blast furnace drilling tools with arc furnace tapping tooling is how part numbers multiply and inventories bloat.
• Plan for higher utilisation. If casting frequency rises, consumable usage rises with it. Stock levels should follow the cast schedule, not the tonnage.
• Do not cut tool quality to fund a transition. A furnace that produces more of the plant’s cash flow deserves better consumables, not cheaper ones.

Frequently asked questions

Does a rising EAF share cut demand for taphole drills?

It reduces the number of tap holes over decades, while raising the intensity of use at the furnaces that remain. For the near and medium term the effect on total taphole drilling tool demand is small and slow.

Can blast furnace drilling tools be used in an EAF shop?

Rarely. Taphole bits and rods are sized and threaded for the drilling machine, not the melting furnace, and the two tool families serve different tasks.

Whether you run the blast furnace route, the electric route or both, tell us your tapping arrangement and we will specify the tooling that belongs on it.