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China Remains World’s Largest Steel Market

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Beijing (TDI): China continues to hold its position as the world’s largest steel market, with annual consumption surpassing 800 million tons, driven largely by growth in the manufacturing sector, according to the China Iron and Steel Association (CISA).

Despite this, the domestic steel industry grapples with significant challenges, including supply-demand imbalances, rising international trade protectionism, and escalating raw material costs.

In the first three quarters of the year, apparent consumption of crude steel decreased by 6.2% year-on-year, with a notable decline of 13.5% in August and 11.1% in September, indicating increasing pressure on supply and demand dynamics.

On a positive note, steel exports have surged, with China exporting 80.71 million tons of steel in the first three quarters, a year-on-year increase of 21.2%.

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However, the average export price dropped to $770 per ton, a decline of 21.6%, further squeezing profit margins for steel companies amid high raw material costs.

The CISA reported that while steel prices are declining, iron ore prices remain high.

The China Steel Price Index (CSPI) averaged 103.66 points in the first three quarters, down 7.67% from the previous year, with the CSPI dipping to 90.42 points in early September—the lowest level in nearly seven years.

Profit margins for key surveyed steel enterprises are under strain, with sales profit margins at only 1.1%, compared to 25.5% to 45.0% for the four major international mining companies, revealing a stark imbalance in profit distribution across the industry.

Additional Challenges

Moreover, rising international trade protectionism poses additional challenges.

The number of anti-dumping and countervailing investigations targeting China’s steel-related products has surged to 23 this year, with expectations that it may exceed 25 by year-end.

Also Read: China to Become World’s Largest Economy by 2035, Report

Despite these hurdles, the CISA highlighted the resilience of China’s steel industry as it undergoes structural optimization.

The demand for specialized types of steel is expected to rise, particularly in emerging sectors such as new energy, high-end equipment manufacturing, and the photovoltaic industry.

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