China’s leading steel mills recorded a 6.9% decline y-o-y in operating income, totaling 4.54 trillion yuan (USD 0.64 trillion) in the January-September 2024 period, The profitability of these mills suffered even more sharply, with gross profits plummeting by 56.4% y-o-y to 28.98 billion yuan (USD 4.1 billion), indicating increased pressures within the sector.
Jiang Wei, Vice President and Secretary-General of the China Iron and Steel Association (CISA), highlighted a growing imbalance between supply and demand in China’s steel market. Jiang Wei said the sector has not yet reached a new equilibrium point and called for self-discipline among steel mills to maintain their production capacity at more sustainable levels.
The sector is also struggling with increasing protectionist trade measures. So far in 2024, 23 anti-dumping and countervailing investigations have been opened targeting Chinese steel, and this number is expected to exceed 25 by the end of the year. In addition to increased safeguard measures, high raw material costs are also weighing down profitability.
Domestic steel consumption has mirrored this challenging environment, with apparent consumption down by 6.2% over the first three quarters of the year. Forecasts suggest a 3% annual decline in steel demand for 2024, with an additional 1% contraction expected in 2025, underscoring the need for a shift in the industry’s approach amid sustained demand pressures and economic uncertainty.
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