For three decades, China has been a steel paradise.

Years of double-digit economic growth and relentless urbanization gave the country an increasing appetite for the alloy. Steel went into everything, from buildings and infrastructure to cars and appliances. Consumption in China has risen at an average rate of 15 percent a year since the turn of the century, and at 689 million tons last year it made up almost half of the world’s total usage.

Alas, the ferrous fiesta may soon fade. China’s annual growth rate has slowed from double-digit figures to around 7 percent. The massive investments in infrastructure that the government unleashed as a stimulus response to the global financial crisis are subsiding. Property markets around the country are cooling fast, leaving developers with a nasty debt hangover.

The upshot is that China may be close to “peak steel.” Analysts at Morgan Stanley, an investment bank, believe that this is the year in which the country’s consumption and production will reach its apex, to decline gently thereafter. Zhang Guangning, chairman of the China Iron and Steel Association, recently declared that “China’s steel production has already hit a peak.”

For the handful of big firms that produce most of the world’s iron ore, the raw material for steel, such arguments are hard to swallow. BHP Billiton, an Australian miner, insists that Chinese demand will keep growing robustly for years. Sam Walsh of Rio Tinto, a British colossus, has predicted that steel production in China will keep rising and eventually reach 1 billion tons a year, compared with about 823 million tons last year. (The U.S. produced 98 million tons last year.)

But such notions may prove to be wishful thinking. By one estimate, these and other mining firms have together splashed out $120 billion since 2011 on new iron-ore deposits.

In a sign of how China’s cooling demand for steel is affecting ore miners, last month Fortescue, an Australian company, was forced to call off a $2.5 billion bond issue, having days earlier tried to raise the same amount through the loans market. CITIC, China’s largest state-run conglomerate, recently announced that its net profits fell by nearly 18 percent last year thanks in part to the troubled iron and steel markets. It was forced to take an impairment charge of $2.5 billion on a massive iron-ore project in Australia that has run into delays and cost overruns.

Aside from the risk of undermining the rationale for investments such as these, what are the potential knock-on effects of China hitting peak steel?

Trade wars, for a start. Unable to peddle all of their output at home, Chinese steel producers have been exporting increasing quantities — to the consternation of producers elsewhere, who accuse them of dumping. MEPS, a consulting firm, estimates that China exported more than 90 million tons of steel last year, which is greater than the entire output of the U.S. steel industry and was a rise of more than 50 percent from the previous year. Exports are continuing to surge this year.

Western steelmakers are pressing their politicians to protect them against the wave of cheap Chinese imports.

On March 25, the European Union said it would impose anti-dumping duties of up to 25.2 percent on various stainless-steel products from China, as well as from Taiwan, after European steelmaking’s trade body, Eurofer, accused mills in both countries of unfair dumping.

The next day, the bosses of America’s steel companies went to Capitol Hill to press Congress to take similar action. Unless China finds ways to moderate its exports, these grumbles may end up at the World Trade Organization.

U.S. Steel cited the pressure of foreign dumping for its decisions last month to idle taconite plants in Mountain Iron and Keewatin, putting on hold the jobs of 1,100 Minnesotans. The company also cut operations at steel mills and other plants in Alabama, Ohio, Texas and Illinois this year, after curtailments at plants in Pennsylvania and Texas last year.]

The bigger impact, though, could be in China itself. Its steel industry is highly fragmented, woefully inefficient and burdened with excess capacity. The central government has tried to force the many state-supported firms to consolidate, but recalcitrant provincial officials keen on preserving local jobs have scuppered such efforts. There are reports that the industry ministry is preparing a fresh push to restructure Chinese steelmaking by making it easier for troubled mills to go bust.

A sign of the central government’s desire for a shakeout is its recent decision to end a long-standing ban on foreign investors owning majority stakes in local steel firms. In the current climate, however, it seems unlikely there will be any great rush by foreigners to buy them.