Industry News

The steel industry is an important basic industry of the national economy, an important support for building a modern strong country, and an important aspect for measuring the comprehensive national strength of a country. During the 14th Five Year Plan period, China's steel industry effectively promoted the optimization of variety structure, expanded export scale, improved development efficiency, and is accelerating the transformation towards high-quality development through reduction and adjustment.

 

The supply side structural reform has achieved significant results. The crude steel production continues to decline, reaching a historical peak of 1.065 billion tons in 2020. Since then, it has gradually declined under policy guidance and market drive, and by the end of the 14th Five Year Plan period, the cumulative reduction has exceeded 100 million tons. As a result, the production of pig iron decreased by over 50 million tons, while the production of raw iron ore remained stable at around 1 billion tons. The production of steel has been decreasing and increasing, and the structure has been optimized. The demand for real estate and other industries has peaked, leading to a continuous decrease in the production of steel bars and wire rods (wire rods). The demand in the automotive, shipbuilding, new energy and other fields has driven a significant increase in the production of medium thick and wide steel strips. In 2025, the proportion of steel bars, wire rods (wire rods) and medium thick and wide steel strips in steel production will be 12.9%, 9.2% and 15.4%, respectively, a decrease of 7.3%, 3.4% and an increase of 2.5 percentage points compared to 2020.

 

Expanding the quantity and improving the quality of steel exports. The export of steel has doubled, reaching a historical high of 119 million tons in 2025. The export volume has increased by 1.22 times compared to 2020, while the import volume has decreased by 70%. The net export volume of steel has increased by 2.38 times. The export product structure is becoming more high-end. As an important material for high-end manufacturing, the export of sheet metal increased by 1.23 times during the same period, and the proportion of export volume to total steel export volume remained stable at over 60%; The upgrading of the global manufacturing industry has driven an increase in demand for steel bars such as gear steel and bearing steel. By 2025, the export volume of bars will account for 16.1%, an increase of 3.2 percentage points from 2020.

 

The industry benefits first decreased and then increased. The operating efficiency of the steel industry experienced a development process of "historical best level - low fluctuation - some rebound" during the 14th Five Year Plan period. In terms of total profit, the total profit of large-scale industrial enterprises in the black metal mining, smelting, and rolling processing industry reached a historical high of 540 billion yuan in 2021, but declined to 83 billion yuan in 2024. With the decrease in raw material prices, continuous optimization of product structure, and sustained growth in exports, the total profit will significantly increase to 155.6 billion yuan in 2025. In terms of profit margin, the profit margin of the black metal smelting and rolling processing industry was 5.3% in 2021, with an average profit margin of less than 1% from 2022 to 2024, and rising to 1.4% in 2025. The profit margin of the black metal mining and beneficiation industry remained at a relatively high level of over 10%.

 

The production layout is highly centralized. Hebei, Jiangsu, Liaoning, Shandong and other coastal provinces are the main steel production bases in China. In 2025, the total output of the top three provinces in terms of iron ore raw ore, pig iron, crude steel, and steel production will account for 71%, 41%, 39%, and 45% of the national total, respectively. Among them, Hebei is the largest province in the steel industry, producing 45% of the country's raw iron ore, 21% of pig iron, 20% of crude steel, and 24% of steel.

 

Overall, during the 14th Five Year Plan period, China's steel industry has shifted from incremental expansion to reduction adjustment, and positive progress and achievements have been made in improving the quality and upgrading of the industry. The period of the 15th Five Year Plan is a crucial period for China's steel industry to move towards high-quality development. On the one hand, we must adhere to the principle of total quantity control, strictly control increment, optimize stock, regulate output, further promote the upgrading of industrial structure and product structure, and optimize industrial regional layout; On the other hand, we must adhere to the principles of "moving towards the new" and "moving towards the green", strengthen technological innovation, focus on promoting the research and development of high-precision and cutting-edge products, expand the application space of steel materials, lead new supply with new demand, and create new demand with new supply.

 

(Source: Economic Daily, Author: Lin Chao, Senior Economist at the Ministry of Information Technology and Industrial Development of the National Information Center)

 

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