The Two Sessions Send New Signals—Which Key Areas Should Steel Traders Focus On?
The Two Sessions of 2026 are currently underway. What policy signals has this year’s Government Work Report sent to the steel trading sector? What new changes will emerge in steel demand? And how can steel trading enterprises pinpoint the right development direction and empower stable, sound operations? To address these questions, on March 6, a reporter from China Metallurgy News conducted an exclusive interview with Li Zhongshuang, General Manager of Shanghai Ruikun Metal Materials Co., Ltd., and Liang Taigeng, General Manager of Shanghai Hualai Enterprise Development Co., Ltd. These two seasoned steel traders, who each specialize in different types of steel products, leveraged this year’s Government Work Report to analyze market trends and propose strategic business approaches.
Reporter of China Metallurgical News: Which parts of this year’s Government Work Report left a deep impression on you? What policy signals do these proposals convey to the steel trading industry?
Li Zhongshuang: The government work report this year, with its emphasis on expanding domestic demand, upgrading equipment, and stabilizing investment, left a deep impression on me. It sends a clear signal to stabilize demand, optimize structure, and control capacity, which will bring multiple benefits to the steel trading industry. In particular, the proposals put forward by National People’s Congress deputies and Chinese People’s Political Consultative Conference members from the steel industry clearly focus on reducing output while improving quality, optimizing the industrial structure, and driving green transformation—with the core goal being to promote high‑quality development rather than mere scale expansion.
In addition, this year’s Government Work Report has adjusted the “energy consumption per unit of GDP target” to a “carbon dioxide emissions per unit of GDP target.” In my view, this marks a significant shift in the green development indicators for the 15th Five-Year Plan period. During the 15th Five-Year Plan, China’s cumulative carbon dioxide emissions per unit of GDP must be reduced by 17%, with a planned reduction of around 3.8% in 2026. The transition from dual control over energy consumption to dual control over carbon emissions reflects more precise governance in the green transformation and underscores our determination to achieve the “dual carbon” goals on schedule. As 2026 is a pivotal year marking the entry of “dual carbon” policy into the stage of substantive implementation, environmental production restrictions are expected to become increasingly routine, thereby imposing substantial constraints on the supply side of the steel industry.
Liang Taigeng: The government work report this year—specifically its emphasis on “strengthening anti-monopoly and anti-unfair competition efforts, reinforcing the binding nature of fair competition reviews, and comprehensively employing tools such as capacity regulation, standards-driven initiatives, price enforcement, and quality oversight to thoroughly address ‘involutionary’ competition and foster a healthy market ecosystem”—as well as its related remarks on green and low‑carbon development, left a deep impression on me. Looking ahead, the state is expected to introduce more detailed policies and measures targeting capacity regulation in the steel industry and carbon emissions management, further optimizing supply structure and promoting dynamic equilibrium between supply and demand.
This year’s Government Work Report sets forth four key requirements for green and low‑carbon development: First, by 2026, reduce carbon dioxide emissions per unit of GDP by around 3.8%; second, improve policies for green and low‑carbon development, implement initiatives to enhance quality, cut costs, and reduce carbon emissions in key industries, and deepen efforts to build zero‑carbon parks and zero‑carbon factories; third, effectively and rigorously manage high‑energy‑consumption, high‑emission projects, accelerate the phasing out of outdated production capacity, support innovation and application of green and low‑carbon technologies and equipment, refine total resource management and comprehensive conservation systems, and strengthen the recycling and reuse of secondary resources; fourth, implement a dual control system for both the total amount and intensity of carbon emissions, improve carbon emission statistics and accounting as well as carbon footprint management systems, and further expand the coverage of the carbon emissions trading market.
This year’s Government Work Report emphasized “reducing carbon emissions per unit of GDP by around 3.8%” and promoted the “AI+” initiative, placing new demands on the steel industry chain. Steel enterprises must accelerate the adoption of green and low‑carbon technologies and drive coordinated upgrades across both the upstream raw material end and the downstream processing stages. At the same time, digital transformation has become the industry standard; the widespread adoption of BIM (Building Information Modeling) and prefabricated construction will further advance the standardization and upgrading of steel‑structure residential buildings, thereby enhancing the precision of steel processing and the efficiency of material delivery.
Based on the suggestions from representatives and members of the steel industry, the industry’s green transformation is sending out two major signals.
On the one hand, industry compliance costs will continue to rise, and low-carbon steel will emerge as a new competitive frontier. Data show that by the end of 2025, more than 219 steel enterprises nationwide had either completed or partially completed ultra-low emission upgrades. This means that in the future, only steel traders who partner with green steel enterprises will be able to ensure environmental compliance throughout their supply chains. Against this backdrop, steel traders will prioritize products from steel enterprises that have obtained “Green Factory” certification and possess ultra-low emission qualifications, thereby driving the establishment of a green supplier evaluation system.
On the other hand, green and low-carbon process technologies are giving rise to new… Section steel Driven by material product demand, the adoption of low-carbon technologies such as hydrogen metallurgy will accelerate the launch of high‑value‑added products like green steel and zero‑carbon emission steel, creating opportunities for steel trading enterprises to tap into the high‑end market.
This year, the steel industry will be incorporated into the national carbon market, meaning that the carbon footprint of steel products will directly impact their market value. Steel trading companies need to acquire data on product carbon emissions, build low‑carbon supply chains, and meet future carbon tariffs as well as the low‑carbon requirements of downstream customers.
Reporter from China Metallurgical News: This year’s Government Work Report emphasizes “adhering to domestic demand as the main driver, coordinating efforts to boost consumption and expand investment, exploring new avenues for domestic demand growth, and better leveraging the advantages of China’s ultra-large-scale market.” What do you think will be the key highlights and new growth drivers for steel demand this year?
Liang Taigeng: Judging from the main projected targets for economic development set forth in this year’s Government Work Report, steel demand is still expected to remain relatively resilient this year, while the structure of demand will continue to improve. The resilience of steel demand stems primarily from ten key supporting factors.
First, this year’s GDP growth target is set at 4.5%–5%, with the aim of “striving for even better results in actual work.”
Second, this year the deficit-to-GDP ratio is planned to be around 4%, with a deficit of 5.89 trillion yuan, an increase of 230 billion yuan over the previous year; for the first time, general public budget expenditures will reach 30 trillion yuan, up roughly 1.27 trillion yuan year-on-year.
Third, we plan to issue 1.3 trillion yuan in ultra-long‑term special government bonds to continuously support the development of “dual priorities” and “two new” initiatives; we also plan to issue 300 billion yuan in special government bonds to help large state-owned commercial banks replenish their capital; and we intend to allocate 4.4 trillion yuan in local government special bonds, while further refining the management of the negative list for special bond projects and piloting self‑review and self‑issuance, with a primary focus on supporting the construction of major projects, the replacement of implicit debt, and the settlement of government arrears.
Fourth, fiscal spending will be maintained at a substantial level while continuously optimizing the expenditure structure, with a focus on boosting consumption, investing in people, and safeguarding people’s livelihoods, thereby enhancing the efficiency of fund utilization.
Fifth, we will continue to implement a moderately accommodative monetary policy, taking the promotion of stable economic growth and a reasonable rebound in prices as key considerations. We will flexibly employ tools such as reserve requirement ratio cuts and interest rate reductions to maintain reasonably ample liquidity and ensure that the scale of social financing and the money supply are aligned with the projected targets for economic growth and the overall price level.
Sixth, we will promote the expansion and upgrading of consumer spending by allocating 250 billion yuan in ultra-long-term special government bonds to support trade‑in programs for consumer goods, while optimizing the implementation mechanisms for these policies. We will also establish a 100 billion yuan special fund for fiscal‑financial coordination to boost domestic demand, leveraging measures such as loan interest subsidies, financing guarantees, and risk compensation to support the broadening of domestic demand.
Seventh, we plan to allocate 755 billion yuan in investment from the central budget and 800 billion yuan in ultra-long-term special government bonds for “dual” infrastructure development, while raising central government investment subsidy standards on a case‑by‑case basis. We will also issue 800 billion yuan in new policy-based financial instruments to encourage greater participation of social capital in investment.
Eighth, we will promote quality improvement and upgrading in key industries, launch a new batch of major technological transformation and upgrade projects, and allocate 200 billion yuan in ultra-long‑term special government bonds to support large‑scale equipment upgrades.
Nine is to deepen the advancement of a people‑centered new type of urbanization, steadily promote the citizenship of rural migrant populations, relax middle school entrance exam registration requirements in light of local conditions, and refine the policy linking “people, land, and funds”; to promote urban renewal with high quality and steadily implement the renovation of old residential communities in towns and cities as well as rundown urban villages.
Tenth, we will strengthen housing security for first-time married couples with their first child, and support families with multiple children in meeting their housing needs. We will focus on stabilizing the real estate market by adopting city‑specific policies to control new supply, reduce inventory, and optimize supply; explore multiple channels to revitalize existing commercial housing stock; and encourage the acquisition of existing commercial housing for use as affordable housing and other such purposes. We will also advance the construction of “good homes” that are safe, comfortable, green, and smart in an orderly manner.
Based on the aforementioned ten supporting factors, China’s steel demand is expected to remain resilient this year. The state’s optimization of the “Two New, Two Heavy” policies will continue to drive the release of steel demand and shift the steel industry from scale expansion to quality enhancement; it is anticipated that this year, the “Two New, Two Heavy” policies will boost… Special Steel Demand has grown by 12 million tons, making it a key pillar for ensuring steady growth in the steel industry.
In addition, it is worth noting that, according to this year’s Government Work Report, scientific and technological innovation and the development of new-quality productive forces will receive prioritized policy support. The report emphasizes the need to vigorously advance deployment in cutting-edge fields such as quantum technology, brain‑machine interfaces, 6G, embodied intelligence, and aerospace. The growth of these related industries will boost steel demand, particularly for high‑end steel. Special Steel …will drive steel enterprises to transform toward high‑tech, high‑value‑added operations. For example, the fuselage of space rockets and cryogenic tanks widely employ high‑strength… Stainless steel Alternative to the traditional Aluminum Alloys that can withstand the extreme thermal loads of atmospheric reentry and meet the requirements for repeated use are essential. Components such as spacecraft fuel tanks and satellite supports must endure temperature variations ranging from -150°C to 300°C, as well as intense radiation; consequently, demand for corrosion‑resistant, lightweight special stainless steels is expected to increase significantly. Over the next three to five years, as the commercial space industry continues to develop, mass production of humanoid robots ramps up, and the construction of 6G test networks progresses, demand for high‑end special steel is poised to enter a golden period of robust growth in both volume and price.
Reporter of China Metallurgy News: In light of the spirit of this year’s Two Sessions nationwide and… Steel Market Current Situation: What advice do you have for the operations of steel trading enterprises?
Li Zhongshuang: From the perspective of industry trends, China’s steel market this year is expected to see a pattern characterized by “a slight overall decline in volume coupled with continued structural optimization.” Demand for construction steel will continue to face downward pressure, while demand for steel in high‑end manufacturing is poised to become the primary driver of growth. Driven by both policy support and industrial transformation, the steel industry will accelerate its transition toward high‑quality development.
On a practical operational level, steel traders are advised to adhere to a business strategy of “fast entry and fast exit, low inventory turnover,” closely aligning with policy directions to seize order opportunities; focus on sectors such as manufacturing, infrastructure development, and equipment upgrades to capitalize on structural demand; rigorously manage operational risks, avoid speculative market bets, and maintain prudent operations with flexible execution. At the same time, steel traders should actively participate in supply chain collaboration and service transformation, accelerating their shift from mere material suppliers to “materials + solutions” service providers, while offering value‑added services such as processing and distribution, as well as technical support, to enhance customer loyalty and strengthen their bargaining power in the market.
Liang Taigeng: Changes in the structure of steel demand will have a certain impact on the operational strategies of steel trading enterprises. Taking construction steel as an example, demand is expected to decline further this year. Relevant institutions predict that this year, China… Construction steel Demand is estimated at around 384 million tons, down 4.1% year-on-year. The core reason for the decline in demand remains the deep adjustment in the real estate market, and it is expected that demand for construction steel will struggle to rebound significantly over the next two years. This will place considerable pressure on steel trading companies that primarily focus on trading construction steel.
Steel traders must clearly understand the evolving industry landscape and proactively adapt to the steel sector’s characteristics of “reducing output while optimizing existing stock,” fully recognizing that shrinking demand for construction steel is a long‑term trend. At the same time, steel traders should maintain stable operations by optimizing procurement strategies, adjusting their customer mix, and expanding high‑value‑added services—while abandoning speculative thinking centered on “waiting for market rebounds” and shifting toward an operational model characterized by “low inventory and rapid turnover.” They should also reduce their reliance on single markets, proactively curtail construction steel inventories, and mitigate the risks associated with market volatility.
In addition, steel traders should accelerate the optimization of their supply chain systems and shift from being mere “channel distributors” to “service providers.” At present, the proportion of direct sales by steel enterprises continues to rise, with some regions seeing direct sales accounting for more than 70%, thereby squeezing the operating space of traditional steel traders. Steel trading companies can no longer rely on information asymmetry to generate profits; they must strengthen their service capabilities and build irreplaceable core competencies. For example, they can focus on policy‑supported sectors such as infrastructure development, urban renewal, and new energy, proactively aligning with project timelines and offering services like precise delivery and financial support. They can also develop integrated processing and distribution businesses, providing value‑added services such as fixed‑length cutting and centralized delivery based on downstream construction schedules, helping customers reduce overall costs.
2026 marks the inaugural year of the 15th Five-Year Plan, and construction in areas such as new infrastructure, urban utility networks, and smart transportation is expected to become a new growth driver for steel demand. Steel traders should proactively position themselves in these related fields and actively expand into emerging markets.
