China Iron and Steel Association: Grasp the development patterns of the steel industry, assess the situation wisely, and act in harmony with the prevailing trends.

On October 28, hosted by the China Iron and Steel Association and Jiangsu Longteng Special Steel The group hosted the economic performance symposium for selected steel enterprises in the third quarter of 2025, held in Changshu, Jiangsu Province. Tang Zujun, Member of the CPC Committee and Vice President of the China Iron and Steel Association, attended the meeting and delivered a concluding speech. Leaders from enterprises such as Ji Bingyuan, Secretary of the Party Committee and Chairman of Longteng Special Steel, also participated in the session to exchange ideas. The meeting was chaired by Zhang Yongjie, Executive Director of the China Iron and Steel Association.

At the meeting, representatives from 22 companies—including China Baowu and Ansteel Group—shared updates on their businesses' operations and performance during the first three quarters. They discussed current industry and corporate challenges, analyzed the development outlook for the fourth quarter, and put forward targeted, constructive opinions and recommendations.

Representatives from participating companies noted that, during the first three quarters of this year, the entire industry adhered to the "Three Firmnesses and Three No's" principles proposed by the China Iron and Steel Association. As a result, the industry as a whole exceeded expectations, with production and operations remaining largely stable and profitability staying steady—laying a solid foundation for continued positive development throughout the year. Meanwhile, the recently concluded Fourth Plenary Session of the 20th Central Committee of the Communist Party of China emphasized that China’s economy boasts a solid foundation, numerous advantages, strong resilience, and vast potential. Importantly, the long-term conditions and underlying trends supporting sustained growth have not changed—providing a robust basis for the industry’s steady and favorable performance.

Regarding the industry outlook for the fourth quarter of this year, most delegates remain cautiously optimistic. While many believe that profits in the first three quarters have surged significantly year-on-year, they also note that the underlying imbalance between strong supply and weak demand has yet to undergo a fundamental shift—and this "strong supply, weak demand" dynamic is expected to persist over the long term. Recently, domestically Steel prices The market trend remains sluggish, with inventories continuing to rise, highlighting that the industry faces significant real-world challenges in the fourth quarter, including weak demand, soaring costs, and persistently low prices—putting substantial pressure on industry profitability. In response, delegates unanimously agreed that, building on the lessons learned from the first three quarters, the industry must maintain strategic clarity and firmly adhere to the "Three Constants and Three No's" business principles. On one hand, companies should continue practicing self-discipline by controlling production and reducing inventory; on the other hand, they must actively implement and enforce relevant national policies on output regulation, thereby safeguarding the hard-won achievements of the first three quarters.

Tang Zujun used two words to summarize the performance of the steel industry in the first three quarters of this year during his meeting summary—“stable” and “rational.” The term “stable” was primarily reflected in Steel Market Price fluctuations have remained relatively mild, and inventory levels remain fairly low, keeping risks generally under control. "Rationality" is particularly evident in the fact that most companies are able to organize production and operations according to the principle of "Three Determinations and Three No's," while declining prices for raw materials and fuels have led to a significant year-on-year improvement in profitability.

Tang Zujun pointed out that the steel industry's performance in the first three quarters primarily reflected eight key characteristics: First, crude steel production saw a slight decline; second, apparent steel consumption dropped significantly, with the decline exceeding that of crude steel output; third, steel exports remained consistently high, though both the product mix and export destinations have shifted; fourth, there was a noticeable shift in the structure of steel product categories, with demand for steel used in construction gradually giving way to growing demand from the manufacturing sector; fifth, overall inventory levels remained low—having stayed at historically subdued levels—but began to rebound somewhat starting in September; sixth, steel prices experienced volatile downward trends, generally remaining lower than the same period last year; seventh, costs for raw materials and fuels declined substantially; eighth, corporate profitability showed signs of recovery, though the underlying foundation remains fragile; and ninth, overall risks remain manageable, with the debt-to-asset ratio staying firmly within a reasonable range.

Tang Zujun emphasized that the steel industry has entered a stage of high-quality development. To ensure stable operations during this phase, it is crucial to properly manage the following key relationships: First, there’s the interplay among profitability, pricing, output, and costs. Companies must place top priority on enhancing profitability and maintaining healthy cash flow. From a financial perspective, profitability hinges on three critical factors: price, output, and cost. When pursuing higher revenues and greater efficiency, companies need to strike an optimal balance between price and output. In a seller’s market—where supply falls short of demand—a rise in production typically exerts minimal pressure on market prices, enabling firms to focus on maximizing profit margins through increased output. Conversely, in a buyer’s market—characterized by weak demand relative to supply—output growth can significantly squeeze prices. As a result, boosting production often fails to translate into higher revenues, and may even lead to losses. In such scenarios, companies should prioritize managing price, cost, and profit effectively. Under conditions where supply outpaces demand, price remains the lifeblood of corporate profitability—and also serves as a vital indicator of the industry’s steady performance. Unlike everyday consumer goods, steel products exhibit relatively inelastic demand; thus, price reductions generally fail to stimulate a substantial increase in consumption. Blindly cutting prices or engaging in cutthroat, "involutionary" competition not only harms a company’s own interests but also undermines the competitiveness of its peers—and ultimately jeopardizes the entire industry’s long-term health. For now, the most pressing task is to rigorously implement the national policies aimed at regulating steel production, rather than resorting to superficial measures like artificially reducing reported output figures. Instead, company leaders must take pricing seriously, treating it as a top-priority initiative that requires comprehensive strategic planning and coordinated action across all departments. In reality, stabilizing prices is no easy feat; it demands collaborative efforts from every stakeholder in the industry. Meanwhile, cost management remains the cornerstone of a company’s operational success, serving as both the gateway to profitability and a key driver of competitive advantage. Efforts to reduce procurement costs, streamline logistics expenses, and optimize overhead expenditures continue to be central to achieving sustainable cost savings and efficiency gains. Despite significant room for improvement, companies must adopt a meticulous, disciplined approach—leveraging cutting-edge technologies and innovative methodologies—to continuously refine their processes, boost productivity, and enhance overall profitability. The journey toward benchmarking, tapping into hidden potential, and driving cost reduction and efficiency improvements is never-ending—it’s an ongoing process, always evolving and moving forward.

Second is the relationship between supply and demand. In recent years, China's steel industry has experienced a fundamental shift in its supply-and-demand dynamics. This round of adjustment is likely to differ significantly from previous ones. Earlier adjustments were made during periods of growth—essentially "growing pains" inherent in the industry's expansion—but they ultimately followed a wave-like upward trajectory. Today, however, the adjustment involves moving downward from the peak, and it may take a relatively long time before the industry reaches a stable plateau. As China’s urbanization and industrialization gradually mature, the gradual decline in steel demand is an inevitable process, reflecting the natural laws governing industry development. It’s also a challenge that the industry must inevitably confront, navigate, and ultimately resolve. At present, the primary contradiction driving the industry—and the root cause of operational difficulties faced by both the sector and individual enterprises—is the severe imbalance between supply and demand. In fact, key performance indicators such as prices, output levels, costs, and profitability, as well as metrics like imports/exports, inventory levels, and apparent consumption, all hinge critically on the delicate balance—or imbalance—between supply and demand. Once this central contradiction is addressed, many other challenges are likely to fall into place naturally.

Third is the relationship between the market and the government. The Fourth Plenary Session of the 20th Central Committee of the Party emphasized that during the 15th Five-Year Plan period, economic and social development must adhere to the combination of an efficient market and a proactive government. The "invisible hand" of the market is responsible for efficiently allocating resources, while the "visible hand" of the government plays a crucial role in guiding, regulating, and providing a safety net—working together to ensure the smooth transformation, upgrading, and high-quality development of the steel industry. At this critical juncture of transformation and upgrading in the steel sector, the relationship between the market and the government requires even more precise definition and coordinated action, demanding simultaneous efforts where neither can be overlooked.

Fourth is the relationship between enterprises and the industry. For businesses, it is essential to deeply understand the industry’s development patterns, structure, and trends. They must not only adapt to the environment and find their unique positioning and competitive edge within the industry framework but also take proactive steps—assessing the situation wisely and acting in harmony with market dynamics. By making strategic choices and fostering innovation, companies should strive to become shapers of industry norms, rather than mere passive recipients. For the industry as a whole, it’s crucial to cultivate a healthy ecosystem that encourages fair competition, fuels innovation, and ensures that the strong survive while the weak are naturally weeded out. Protecting lagging enterprises will only stifle industry progress, while suppressing the innovative drive of leading companies risks undermining the sector’s overall competitiveness. Ultimately, the industry’s prosperity depends on the vitality and value-creation capabilities of its constituent enterprises. A thriving industry nurtures corporate growth, while industry-wide crises inevitably spur businesses to undergo transformative change. After all, corporate interests are intrinsically tied to industry-wide benefits—only when the industry prospers can individual companies truly thrive. In the steel industry, every enterprise, regardless of size, bears the responsibility—and obligation—to combat internal competition for limited gains and actively safeguard the industry’s ecological balance. Every single effort counts, and all companies must strengthen self-discipline to contribute meaningfully to the industry’s sustainable, high-quality development.

Fifth is the relationship between the present and the long term. This relationship can also be described as the balance between survival and growth. Currently, China's steel industry is undergoing a profound structural transformation. Shifting market demands, persistently high costs, and declining profitability have made survival an urgent challenge for many companies. Meanwhile, the rising tide of green and low-carbon initiatives, smart manufacturing, and technological innovation has positioned growth as an unavoidable long-term priority. Successfully navigating this delicate balance is the key for both individual enterprises and the industry to weather economic cycles and move toward high-quality development.

Tang Zujun concluded by saying that China's steel industry is currently undergoing an unprecedented and transformative period of profound adjustment and restructuring. This sweeping industrial shift will redefine the competitiveness of China's steel sector, propelling us from being a global steel powerhouse toward becoming a true steel superpower. Amidst this journey, opportunities and challenges coexist, and both hope and difficulties lie ahead. Only by proactively embracing change, deeply understanding the evolving trends of the industry, carefully assessing the situation, and acting in harmony with market dynamics, can we secure an unassailable position in the competitive landscape—and ultimately achieve sustainable, high-quality development for the industry.