With slowing demand and mounting inventory pressures, the steel industry is relying on high-end products and low-carbon initiatives to break the deadlock.
As the year-end approaches, social inventories of steel have begun to rise. According to a research report by Cinda Securities, as of November 28, social inventories of the five major steel products totaled 10.073 million tons, an increase of 27.82% year-on-year. The latest data from the China Iron and Steel Association show that, since the beginning of this year, steel production has remained largely stable, while apparent consumption has slightly declined. Judging from announcements by listed companies, some firms have increased the proportion of specialty steel production and sales, thereby boosting their performance. Industry insiders say that the steel sector needs to accelerate technological innovation, enhance its industrial competitiveness, actively expand application scenarios for steel structures, and proactively position itself in the new energy sector.
High-end products contribute to profits.
From the perspective of consumption volume, the latest data from the China Iron and Steel Association show that in the first three quarters of 2025, China's apparent steel consumption totaled 649 million tons, a year-on-year decrease of 5.7%. Since the start of the 14th Five-Year Plan, China's apparent steel consumption has been declining continuously, and steel production as a whole has also shown a downward trend. Specifically, China's apparent consumption has fallen from a peak of 1.04 billion tons in 2020 to 890 million tons in 2024—a decline of 150 million tons, representing an average annual drop of 3.8%.
Regarding the latest profitability situation in the steel industry, Xia Nong, Vice President of the China Iron and Steel Association, pointed out at the 21st China Steel Industry Chain Summit that, since the beginning of this year, the steel industry has generally performed well, with stable production and operations. Profitability has significantly improved compared to last year. However, domestic demand for steel products has declined, and inventories have risen somewhat. Although the industry’s profitability turned from a loss last year to a profit in September, the profit amount saw a substantial month-on-month decline compared to August, indicating that the industry’s profit base remains unstable.
Looking at the third-quarter reports of the steel industry, data show that among the 46 listed steel companies that have already released their third-quarter reports, 31 reported year-on-year growth in net profits attributable to shareholders of listed companies, accounting for approximately 67.39%.
Some listed companies in the steel industry have successfully turned around their losses by increasing the proportion of high-end products and implementing measures to reduce costs and improve efficiency.
Inventory levels have risen somewhat.
According to the latest bi-weekly report on steel production from key enterprises released by the China Iron and Steel Association, as of mid-November 2025, key statistical steel enterprises collectively produced 19.43 million tons of crude steel, with an average daily output of 1.943 million tons—a 0.9% increase from the previous period. Pig iron 17.97 million tons, with an average daily output of 1.797 million tons—a 0.4% decrease from the previous month; steel products totaled 19.24 million tons, with an average daily output of 1.924 million tons—a 2.1% increase from the previous month.
Earlier, in October, both the nationwide production and the production by key statistical steel enterprises showed year-on-year declines in crude steel output. In October 2025, the nation’s crude steel production totaled 72 million tons, down 12.1% year-on-year; daily output reached 2.3226 million tons, a month-on-month decrease of 5.2%. Pig iron production stood at 65.55 million tons, down 7.9% year-on-year, with a daily output of 2.1145 million tons, a month-on-month decline of 4%. From January to October, the nation’s cumulative crude steel production amounted to 818 million tons, down 3.9% year-on-year, with a cumulative daily output of 2.6904 million tons. Pig iron production totaled 711 million tons, down 1.8% year-on-year, with a cumulative daily output of 2.34 million tons. Steel production reached 1.218 billion tons, up 4.7% year-on-year, with a cumulative daily output of 4.0052 million tons.
Regarding steel inventory levels at key enterprises, data from the China Iron and Steel Association show that as of mid-November 2025, the steel inventory of key statistical steel enterprises stood at 15.61 million tons, an increase of 120,000 tons, or 0.8%, compared to the previous ten-day period. This represents an increase of 3.24 million tons, or 26.3%, compared to the beginning of the year; a decrease of 970,000 tons, or 5.9%, compared to the same ten-day period last month; an increase of 60,000 tons, or 0.4%, compared to the same ten-day period last year; and an increase of 280,000 tons, or 1.8%, compared to the same ten-day period two years ago.
According to a research report by Xinda Securities, as of November 28, social inventories of the five major steel products totaled 10.073 million tons, an increase of 27.82% year-on-year. As of November 28, in-plant inventories of the five major steel products stood at 3.935 million tons, up 2.11% year-on-year.
Multiple measures to promote development
The China Iron and Steel Association believes that steel enterprises must strictly enforce the policy on controlling crude steel production, continue to resolutely uphold the “Three Determinations and Three No’s” business principles, strengthen self-discipline, break the vicious cycle of internal competition, and jointly promote the industry’s steady, orderly, and sustainable healthy development. In the coming period, domestic demand for steel products will generally show a slow downward trend. China’s steel industry has shifted from a phase of “incremental growth” to a new stage of “stock optimization” and “quality improvement and upgrading.”
Regarding the high-quality development of China’s steel industry in the coming period, Xia Nong put forward five suggestions and recommendations: First, we should further deepen supply-side structural reform, focusing on controlling new capacity, optimizing existing capacity, promoting mergers and acquisitions, and ensuring smooth circulation. Second, we should take high-endization, intelligentization, greenization, and integration as our guiding principles, further enhancing our innovation-driven development capabilities and elevating the overall development level of the entire industrial chain. Third, we should accelerate the development of iron ore resources and strengthen... Scrap steel First, focus on resource utilization to further enhance resource supply capacity and safeguard the security of industrial chains. Second, with a focus on promoting integrated development within the steel structure construction industry chain, further expand the market for steel material consumption. Third, further elevate the level of internationalization in the steel industry.
According to the China Iron and Steel Association, as of the end of October this year, a total of 219 steel enterprises have either completed or partially completed ultra-low emission upgrades and assessment monitoring. Among them, 165 steel enterprises have completed ultra-low emission upgrades across all production processes, involving crude steel capacity of approximately 663 million tons. The investment per ton of steel for these ultra-low emission upgrades is about 4,470.6 yuan, and the average environmental protection operating cost per ton of steel is roughly 2,124.4 yuan. Additionally, 54 steel enterprises have publicly announced the completion of ultra-low emission upgrades for selected production processes, covering crude steel capacity of about 188 million tons. The total investment in fully completing ultra-low emission upgrades across the industry has exceeded 310 billion yuan. As of mid-November 2025, a total of 21 enterprises have completed and publicly announced their acceptance of ultra-high energy efficiency standards; 10 enterprises have been designated as “Demonstration Enterprises for Best Practices in Dual-Carbon Energy Efficiency”; and 11 enterprises have been recognized as “Demonstration Processes/Equipment for Best Practices in Dual-Carbon Energy Efficiency.”
Li Daokui, Dean of the Institute for Chinese Economic Thought and Practice at Tsinghua University, suggested that steel enterprises should accelerate technological innovation to enhance their industrial competitiveness, actively expand application scenarios for steel-structure buildings, and proactively position themselves in the new energy sector. He also recommended that companies strengthen policy communication with government departments, advance their internationalization strategies at a more steady pace, and leverage a higher level of opening-up to drive high-quality development in the industry.
