The Steel Industry: Trapped in a 'Prisoner’s Dilemma'

The European Union accounts for the largest share of global steel imports. From January to September 2024, the EU’s steel imports (excluding intra-EU trade) totaled USD 33.09 billion in value and 37.719 million metric tons in volume—a 3.3% increase year-on-year. Its top five steel import partners were Russia (4.439 million tons), India (3.611 million tons), Turkey (3.509 million tons), Ukraine (2.638 million tons), and China (2.545 million tons). The EU’s (excluding intra-EU trade) largest steel export markets were Turkey (9.499 million tons), the UK (2.859 million tons), the United States (2.728 million tons), Egypt (1.664 million tons), and Switzerland (1.623 million tons). Germany—backed by its robust automotive sector and construction investment—is one of the EU’s leading steel importers. From January to September 2024, Germany imported 3.823 million tons of steel; in 2023, its apparent consumption of finished steel products reached 28 million tons—the highest among all EU member states. Turkey’s Steel Trade Trends Turkey is one of the world’s major steel importers. From January to August 2024, Turkey’s steel imports amounted to USD 17.36 billion—a 9.1% decline year-on-year—with a total volume of 29.184 million tons. Its main imported steel categories included scrap steel (14.957 million tons), semi-finished products (4.853 million tons), flat-rolled products (3.166 million tons), alloy flat-rolled products (1.131 million tons), and pig iron (0.951 million tons). Turkey’s top steel suppliers were the United States (3.56 million tons), Russia (3.424 million tons), and China (2.631 million tons). China’s Steel Industry: The ‘Prisoner’s Dilemma’ As the world’s largest steel producer and consumer, China dominates the global steel industry. From January to September 2024, China exported 74.235 million tons of steel—16.5% of global exports—with Vietnam (9.117 million tons), South Korea (6.128 million tons), Indonesia (3.720 million tons), Thailand (3.640 million tons), and the UAE (3.327 million tons) as its top destinations. Flat-rolled iron or non-alloy steel products accounted for 33.8% of China’s total steel exports. China is also the world’s largest steel consumer. However, cooling in the real estate sector and broader economic slowdown have dampened domestic demand: steel imports fell by 13.6% in 2023, and from January to September 2024, China’s steel import value stood at USD 52.42 billion—a 1.7% decline year-on-year. Notably, falling demand has not translated into reduced capacity; the persistent problems of “excess capacity” and “supply-demand imbalance” have endured for years. Starting in 2013, China’s Ministry of Industry and Information Technology, State Council, Ministry of Finance, and National Development and Reform Commission jointly issued policies and guidelines to alleviate overcapacity, while provincial and municipal governments set specific targets for resolving excess capacity. Yet the steel industry continues to face the paradoxical situation of “cutting capacity but ending up with more.” Survey data shows that although steel capacity in 2023 declined from its peak in 2016, it remains massive—exceeding 1.2 billion tons.

Steel Industry Profits Under Pressure in the First Three Quarters; Supply-Demand Structure May Gradually Improve

Amid persistently high costs and weak demand, the steel industry posted lackluster performance in the first three quarters. According to Mysteel, as of October 31, the combined revenue of 36 listed steel enterprises reached RMB 163.417 billion, with net profits totaling approximately RMB 18.182 billion. Only nine companies reported year-on-year growth in net profit, while 14 incurred losses. Industry analysts told reporters that the primary drivers behind the industry’s profit decline in the first three quarters were falling steel prices, elevated raw material costs, and insufficient demand. Nevertheless, through continuous efforts to cut costs, improve efficiency, and upgrade product offerings, steel enterprises’ profitability and profit levels are expected to gradually recover. Broad-Based Decline in Steel Enterprises’ Performance According to statistics released by the China Iron and Steel Association, in the first three quarters of this year, key monitored steel enterprises recorded RMB 4.66 trillion in revenue—a 1.74% year-on-year decline—and RMB 62.1 billion in total profit—a 34.11% year-on-year drop. Their sales profit margin stood at 1.33%, down 0.66 percentage points year-on-year. Notably, nearly 40% of these enterprises reported losses. Even industry leaders—including Baosteel Co., Ltd., Ansteel Co., Ltd., and Maanshan Iron and Steel Co., Ltd.—faced challenging conditions. On the evening of October 24, Baosteel released its third-quarter report for 2023: its revenue for the first three quarters totaled RMB 255.017 billion, down 8.35% year-on-year; net profit attributable to shareholders of the listed company was RMB 8.35 billion, down 11.76% year-on-year. Meanwhile, Ansteel achieved RMB 84.288 billion in revenue for the first three quarters of 2023—a 16.42% decline year-on-year—and reported a net loss attributable to shareholders of RMB 2.115 billion, representing a staggering 1,195.85% deterioration year-on-year. Maanshan Iron and Steel posted RMB 73.917 billion in revenue for the same period—a 6.8% decline year-on-year—and a net loss attributable to shareholders of approximately RMB 1.598 billion, a 340.48% deterioration year-on-year. A senior executive at a steel enterprise revealed to reporters that the industry experienced a sluggish first half of the year, marked by oversupply, falling prices, shrinking profits, and an expanding number of loss-making firms. Particularly since the second quarter, intensifying supply-demand imbalances have driven steel prices into prolonged low-level volatility, further exacerbating operational pressures on steel producers. In fact, supply has indeed outpaced demand in the steel industry this year. According to data released by China’s National Bureau of Statistics, in the first three quarters, China’s crude steel output reached 795 million tons—a 1.7% increase year-on-year; pig iron output hit 675 million tons, up 2.8% year-on-year; and steel product output totaled 1.029 billion tons, up 6.1% year-on-year. Meanwhile, crude steel’s apparent consumption in the same period stood at 731 million tons—a 1.5% decline year-on-year. Bi Hongbing, a steel analyst at ZhuoChuang Information, pointed out that the main reasons behind the industry’s profit slump in the first three quarters centered on falling steel prices, high raw material costs, and weaker-than-expected demand. Bi noted that the foremost factor was declining steel prices. Taking hot-rolled coil—the mainstream steel product—as an example, its price rose initially then fell during the first three quarters, remaining in a prolonged downward trend after April. By end-September, the benchmark Shanghai market price for hot-rolled coil stood at RMB 3,810 per ton—a 3.54% decline year-on-year and RMB 310 lower than the RMB 4,120 per ton level at the start of the year, representing a 7.52% drop.

Steel Industry Profits Drop 27.4% in First Three Quarters Amid Persistent Supply-Demand Imbalance

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China's steel industry profits fell 27.4% in the first three quarters per the China Iron and Steel Association, with revenue down 2.3%. The sector faces a 29.6% loss rate due to ongoing supply-demand imbalances.

caixin

2026-10-30

Steel Industry Profits Drop 27.4% in First Three Quarters Amid Persistent Supply-Demand Imbalance

Steel Industry Profits Drop 27.4% in First Three Quarters Amid Persistent Supply-Demand Imbalance

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