Luo Tiejun: China's position as the world's largest domestic steel market will persist for a long time.
China's steel demand will remain within the peak plateau range for a considerable period. It is predicted that China's crude steel output will be 800 million to 900 million tons by 2035, and is expected to remain around 800 million tons after 2050. On May 15, Luo Tiejun, Standing Committee Member and Vice President of the China Iron and Steel Association, stated at the 16th International Symposium on Metal Recycling and Application in China that "China, as the world's largest domestic steel market, will continue to exist for a long time."
Industry economic benefits improved year-on-year in the first quarter
Luo Tiejun first introduced the operating conditions of China's steel industry in the first quarter of this year. In the first quarter, the industry's economic benefits improved year-on-year, the "stable" trend continued, and "new" momentum grew, but it faced difficulties such as supply exceeding demand and steel prices operating at low levels. First, the situation of strong supply and weak demand has not fundamentally changed. According to the National Bureau of Statistics, the apparent consumption of crude steel in the first quarter of 2025 was 230.16 million tons, down 1.3% year-on-year, and the crude steel output was 259.33 million tons, up 0.6% year-on-year. Although the apparent consumption in March increased by 3.5% year-on-year, the output growth rate reached 4.6%, and the supply-demand contradiction remained prominent.
Second, the major steel-using industries showed significant differentiation. The real estate industry is still in the bottoming-out stage. In the first quarter, real estate investment, new starts, construction area, and commercial housing sales area decreased by 9.9%, 24.4%, 9.5%, and 3%, respectively. Manufacturing demand showed slight differentiation, with output growth in industries such as automobiles and home appliances providing some support for steel demand, but the output of some equipment in the machinery industry fluctuated, and the indicators in the shipbuilding industry also fluctuated. Judging from key indicators in 2025, the growth rate of infrastructure investment slowed down, and the steel demand of the manufacturing industry has not yet peaked. Overall, it shows the characteristics of "decreasing total demand and changing consumption structure."
Third, prices fluctuated at low levels, and profits were under pressure. Since April, affected by external factors such as the US countervailing duties, steel prices have fallen further. Although the prices of raw materials (such as coking coal ) have fallen, but iron ore prices remained relatively firm. Entering 2025, iron ore prices remained high and volatile, while the supply pattern of coking coal was relatively relaxed, and prices fell.
"Overall, industry profits have improved, but they are still at a relatively low level." Luo Tiejun said that although the industry's economic benefits improved year-on-year in the first quarter.
The steel industry has transitioned from incremental development to stock optimization
Luo Tiejun believes that the steel industry has transitioned from incremental development to stock optimization, and the steel industry is no longer a cyclical cycle, but a change in the direction of development.
First, China's crude steel output has peaked. Luo Tiejun said that from a total perspective, China's crude steel output has peaked, but the peak performance of various varieties is different. For example, from 2020 to 2024, the cumulative output of rebar + wire rod decreased by about 100 million tons, hot-rolled coil output increased by 95 million tons, and electrical steel output increased by 5.7 million tons.
"Under the current background of declining demand and a downward market, production reduction has become an industry consensus, and the key is to transform it into unified action." Luo Tiejun emphasized.
Second, the total demand has decreased, and the consumption structure has changed. Data shows that in 2024, China's apparent consumption of crude steel decreased by 155.38 million tons compared to 2020, a decrease of 15%. Based on this judgment, the steel industry has transitioned from the incremental development stage to the stock optimization stage. "The peak of development in the real estate industry has passed, infrastructure construction is gradually slowing down, and the development of the manufacturing industry has not yet peaked, and overall steel demand has fallen." Luo Tiejun believes that "China's steel demand will remain within the peak plateau range for a considerable period."
Third, steel exports have increased in volume but decreased in price. Luo Tiejun said that in the first quarter, the trend of increased volume and decreased price in China's steel exports was obvious, and coupled with the increase in international trade frictions, the environment facing steel exports has become more complex, and uncertainty and pressure are increasing. Data shows that steel exports in 2024 reached a historical second high, and crude steel exports reached a historical high. The structure of steel exports continues to be optimized, with the proportion of long products decreasing and the proportion of plates increasing. At the same time, the export regions of steel continue to be adjusted, with exports to Europe and the United States decreasing and exports to Asia, Africa, and Latin America increasing.
Fourth, international trade uncertainty poses challenges to steel exports. The excessively high tariffs imposed by the United States have little impact on China's direct steel exports to the United States, but we must pay close attention to the chain reaction caused by measures taken by other countries. In addition, the US tariffs on some Southeast Asian and American countries will affect China's steel exports to these regions. In recent years, downstream steel-using industries have performed well in exports, which is an important driving force for the growth of steel demand in the manufacturing industry. In 2024, China's indirect steel exports to the United States were mainly machinery, metal products, containers, and home appliances, accounting for about 90% of the total exports to the United States. Under the background of a deteriorating trade environment, steel indirect exports driven by manufacturing face challenges.
Adhering to the export orientation of "promoting high-end, stabilizing surrounding areas, and strengthening supervision"
Luo Tiejun shared his views on key tasks in the steel industry, including capacity governance, industry self-discipline, import and export, and green and low-carbon development.
First, strictly control new capacity and open up exit channels. Luo Tiejun said that under the current situation, it is necessary to strictly control new capacity and ensure that backward capacity can smoothly exit the market to optimize the capacity structure and alleviate the supply-demand contradiction. In the overall thinking of capacity governance, first, we must strictly control the incremental capacity, second, optimize the existing capacity, third, promote mergers and acquisitions, and fourth, open up exit channels. He suggested that government departments should stop the trading of production capacity and study the establishment of a "special fund for the exit of steel production capacity."
Second, oppose involution and strengthen self-discipline. This year's Government Work Report proposed to comprehensively rectify "involutionary" competition. Luo Tiejun said that from the industry perspective, strengthening industry self-discipline and opposing "involutionary" competition has become an increasing industry consensus, and the key is to transform the consensus into action. From the enterprise perspective, regional enterprises have spontaneously launched regional self-discipline actions to maintain regional market stability. In particular, it is necessary to give full play to the leading role of leading enterprises and promote the orderly development of regional and product markets.
Third, strengthen the export orientation of stable growth. Luo Tiejun said that with the intensification of Sino-US trade friction, the trade environment has further deteriorated; the domestic supply-demand contradiction has further increased, which will inevitably be transmitted to the export market, and under the influence of other factors, China's steel exports are facing considerable pressure. "But Chinese steel is still the most competitive industry in the world, and steel products have a competitive advantage in the international market." He emphasized.
"On the premise of meeting domestic demand, a reasonable amount of steel exports is conducive to constantly tracking the world's advanced steel manufacturing level and meeting the needs of the international market." Luo Tiejun proposed that under the current situation, we should adhere to the export orientation of "promoting high-end, stabilizing surrounding areas, and strengthening supervision."
Fourth, the carbon fulfillment process of the steel industry. Regarding the Ministry of Ecology and Environment's issuance of the "National Carbon Emission Trading Market Covering Steel, Cement 、 Aluminum In the "Metallurgy Industry Work Plan", Luo Tiejun introduced: "According to the Ministry of Ecology and Environment's plan, 2024-2026 will be the implementation phase of carbon compliance, with quota allocation linked to production capacity and output; after 2027, it will gradually tighten and introduce the baseline method. Long-process enterprises need to optimize emission intensity, while short-process enterprises are not yet included in the carbon market. Currently, this plan complies with direct emissions and does not consider indirect emissions."
Fifth, green and low-carbon is the direction of high-quality development of the industry. "For a period of time in the future, green and low-carbon will still be the keywords for the high-quality development of China's steel industry." Luo Tiejun said that according to relevant research results, in the process of China's steel industry achieving carbon neutrality by 2060, the contribution of crude steel output reduction to carbon emission reduction is 41%, the contribution of raw material structure optimization is 4%, the contribution of process structure optimization is 36%, and the contribution of low-carbon technology application is 17%.
Scrap steel Resources are key factors in energy saving and carbon reduction in the steel industry
"The utilization of scrap steel resources is crucial for energy saving and carbon reduction in the steel industry and can significantly reduce carbon emissions." Luo Tiejun said when analyzing the development trend of China's scrap steel industry.
The energy-saving and carbon-reducing effect of scrap steel is significant. According to calculations, the average carbon dioxide emission of traditional long-process steel is 1.8 tons per ton, while the carbon dioxide emission of all-scrap steel electric furnace steelmaking is only 0.36 tons per ton, only 20% of the long-process. Promoting the output of scrap steel and the orderly development of short-process electric furnace steelmaking are complementary. The Steel Association has established an electric furnace steel branch for this purpose, and its main work is to promote the healthy development of both aspects.
China's scrap steel utilization level needs to be improved urgently. Compared with developed countries such as the United States, Japan, and the European Union, China's scrap steel utilization is at a relatively low level. The scrap steel cost of China's short-process enterprises accounts for about 68% of the total operating cost, which is about 15 percentage points higher than that of developed countries. "Under the conditions of relatively insufficient scrap steel supply and long-term low utilization rate of electric furnace steel capacity, electric furnace steel should be developed in an orderly manner." Luo Tiejun emphasized.
The total potential of scrap steel resources is huge. According to the prediction of research institutions on the total amount of scrap steel resources in China, in the future, with the changes in crude steel output, the annual potential of scrap steel resources in China will exceed 200 million tons. This provides strong support for the green and low-carbon development of China's steel industry.
Luo Tiejun introduced that in order to promote the healthy development of the scrap steel industry, the China Iron and Steel Industry Association has continuously reflected the industry's appeals in terms of tax invoices and standards to government departments in recent years, improving the recycling system, and promoting technological and technological progress in the scrap steel field. Taking the promulgation and implementation of the "Fair Competition Review Regulations" by the State Council as an opportunity, it promotes the wider implementation of reverse invoicing, promotes the in-depth promotion of compliant operations, and coordinates with government departments to build a national "one-game-of-chess" resource management mechanism.
