Industry group says China remains the world's largest steel consumer with an annual consumption above 800 million tons

According to China Iron and Steel Association (CISA), they announced that China still remains the world's largest steel consumption market, which has been over 800 million tons annually. Manufacturing sector embracing structural improvements, becoming an integral part of industry expansion

But the domestic steel industry still has three major problems, namely imbalance between supply and demand, higher international trade protectionism and exorbitance of raw materials, said CISA.

Apparent crude steel consumption fell by 6.2% year on year over the first three quarters of the year. Strong declines of 13.5% and 11.1% in August and September respectively, reflected increasing pressure on demand-supply balance.

Nonetheless, steel exports have increased on a year-on-year basis, driven by robust global market demand for Chinese steel. China shipped 80.71 million tons of steel in the first three quarters, up 21.2 percent year on year, according to customs data.

Steel's average export price in this period was $770/tonne, down 21.6% y/y, indicating the high cost of raw materials is squeezing steel company margins.

CISA says steel prices lower, iron ore prices firm The average China Steel Price Index (CSPI) during Q1–Q3 was recorded at 103.66 points, a 7.67% year-on-year decrease. As seen, the CSPI saw its lowest level in nearly seven years, reaching only 90.42 points in early September.

And while the margin on steel for key surveyed steel enterprises in the first six months of the year was just 1.1%, it stood between 25.5% and 45.0% for major international mining companies, indicating a skew in the distribution of benefits across the industrial chain [24].

Protectionism at record levels is making it even more difficult for the steel industry to do its job. This year, China has already initiated 23 anti-dumping and countervailing investigations into steel-related products. The agency expects the annual total to be over 25, more than the total for the previous three years combined.

All of these factors will help ensure continued problems for Chinas steel industry, but also its survival as dating for its structural adjustment. Jiang Wei, vice president of the China Iron and Steel Association (CISA), said the industry is moving into a period of slower growth and capacity optimisation.

Development of new energy, high-end equipment manufacturing and the photovoltaic industry will lead to the increase in domestic demand for specialised steel varieties. (Making) up for, in 2023, 48% of total steel demand are manufacturers; construction industries account for the balance of 52%.

Steel market expectations have become more optimistic due to recent government policies to support high-quality economic development. Continued capital improvement and trade-in policies in various sectors also hold promise for the steel industry's continued growth.

Shi Hongwei, CISA deputy secretary, expects Chinese steel consumption to equal current levels in 2025, with manufacturing in particular an increasingly important market support factor.

The industry group intends to implement a capacity exit mechanism, clarify the demands for eliminating outdated capacity, and facilitate profit-oriented steel production. Until the end of the 2025, the aim is to have thousand of regional steel companies carry out ultra-low-emission conversions with more than 80% of national ability to upgrade.