2025-08-18
Recently, the demand for steel is weak domestically and strong internationally.
The latest statistics show that the recent national steel demand presents a pattern of domestic weakness and external strength. At the same time, the release of steel production capacity has increased, increasing the supply pressure on the steel market.
1. From the perspective of domestic demand, the year-on-year growth rates of the two major areas of steel consumption have both declined.
The first is the slowdown in industrial production growth. According to statistics, from January to July 2025, the added value of industrial enterprises above designated size nationwide increased by 6.3% year-on-year, a decrease of 0.1 percentage points from the growth rate in the first half of the year; among them, the added value of industrial enterprises above designated size in July increased by 5.7% year-on-year, a decrease of 1.1 percentage points from the growth rate in June, which is the lowest growth rate since this year. Important steel-consuming products: Automobile production increased by 10.5% year-on-year from January to July, a decrease of 0.3 percentage points from the growth rate in the first half of the year; of which automobile production in July increased by 8.4% year-on-year, a decrease of nearly 2 percentage points from the growth rate in the first half of the year; the year-on-year growth rate of generator set production in July was 34.6%, a decrease of 26 percentage points from the growth rate in the first half of the year. The year-on-year growth rate of industrial robot production in July was 24%, a decrease of 18 percentage points from the growth rate in June.
It is worth noting that a large part of the current steel consumption in industrial production still comes from export-driven demand. According to statistics, from January to July this year, the production and sales of new energy vehicles nationwide reached 8.232 million and 8.22 million respectively, an increase of 39.2% and 38.5% year-on-year respectively, of which 1.308 million new energy vehicles were exported, an increase of 84.6% year-on-year. In the first seven months of this year, China exported 46.81 billion yuan of air conditioners, an increase of 4.9% year-on-year. Among construction machinery, from January to July, major excavator manufacturers across the country exported 64,715 excavators, an increase of 13% year-on-year, accounting for 47% of the total sales during the same period. It can be seen that without a large number of foreign demand orders, the output of domestic steel-consuming products such as automobiles, construction machinery, and home appliances will inevitably decrease a lot, thereby weakening their steel demand.
The second is a sharp decline in the growth rate of fixed asset investment. According to statistics, from January to July 2025, national fixed asset investment (excluding rural households) increased by 1.6% year-on-year, a decrease of 0.63% month-on-month. The increase was 2.6 percentage points lower than that in the first quarter of this year, the lowest growth level in nearly two years; among them, infrastructure investment (excluding power, heat, gas and water production and supply industries) increased by 3.2% year-on-year, a decrease of 1.4 percentage points from the growth rate in the first half of the year. The year-on-year growth rates of other equipment manufacturing investments, transportation equipment manufacturing investments, and electrical machinery and equipment manufacturing investments, which consume a lot of steel, have also declined to varying degrees. In the structure of fixed asset investment, national real estate development investment from January to July decreased by 12% year-on-year, and the decline was 2.2 percentage points larger than that in the first quarter of this year. Fixed asset investment is an important area of steel consumption in China, especially the demand for construction steel. The sharp decline in its investment growth level means a weakening of domestic steel demand.
2. From the perspective of external demand, steel exports continue to grow strongly.
Because the "rush to export" effect still exists, national steel exports continued to grow strongly in July. Customs statistics show that from January to July 2025, the country exported 67.983 million tons of steel, an increase of 11.4% year-on-year; of which 9.836 million tons of steel were exported in July, an increase of 25.7% year-on-year, and the growth level increased again. According to this calculation, the annual steel export volume is about 100 million tons, maintaining a large quantity scale. Indirect steel exports are also strong. According to statistics, in the first seven months of this year, China exported 9.18 trillion yuan of mechanical and electrical products, an increase of 9.3% year-on-year, accounting for 60% of China's total exports; of which automobile exports were 513.46 billion yuan, an increase of 10.9%.
3. While domestic demand is weakening, the pressure on steel supply is further increasing.
In summary, domestic steel demand has weakened at this stage, but the pressure on domestic steel supply has further increased. According to statistics, from January to July 2025, the national steel output was 860.47 million tons, an increase of 5.1% year-on-year; of which the steel output in July was 122.95 million tons, an increase of 6.4% year-on-year, and the growth rate increased. Even if steel production falls back in the next few months, it is a foregone conclusion that the national steel production will exceed 1.4 billion tons in 2025. The ever-increasing steel production flowing into the market will inevitably form heavy market pressure. .(Original article by Lange expert Chen Kexin, please indicate the source for reprinting)
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