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+title: New Trends in the Development of the Steel Industry
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+
+In recent years, as China's urbanization process has entered the middle and late stages, the demand for construction steel is undergoing a profound transformation from "total expansion" to "structural optimization". This change not only reshapes the steel consumption pattern, but also accelerates the overall transformation and upgrading of the steel industry.
+
+## I. Construction Steel: Peak Total Volume, Structural Differentiation
+
+Over the past 20 years, China's urbanization rate has rapidly increased from 30% in 1996 to 67% in 2024, with an average annual growth rate of 1.42% between 1996 and 2017. During this period, large-scale urban expansion drove explosive growth in demand for construction steel. However, since 2018, the average annual growth rate of urbanization has slowed to 0.97% and is expected to further slow down after breaking through 70%—referring to the experience of developed countries such as the United States, Japan, and South Korea, this means that the peak demand for construction steel dominated by new construction has passed.
+
+Data shows that since the real estate cycle peaked in 2021, the apparent consumption of rebar has declined simultaneously, with an average annual decrease of 5.88% from 2021 to 2024, and it is difficult to reverse in the short term. The pulling effect of traditional residential and commercial real estate on steel continues to weaken.
+
+But structural opportunities are emerging. The Central Urban Work Conference clearly states that in the future, it will steadily promote the transformation of urban villages and dilapidated houses, accelerate the construction of urban infrastructure "lifeline" safety projects, and focus on promoting the renewal of old pipelines such as gas, water supply and drainage, and heating. According to estimates by the National Development and Reform Commission, the country needs to renovate about 600,000 kilometers of various municipal pipelines in the next five years, with a total investment of about 4 trillion yuan. This round of "urban renewal" will drive the phased demand for rebar, medium plate and welded steel pipes, although its steel intensity per unit investment is significantly lower than that of new projects.
+
+At the same time, the green and low-carbon transformation has opened up a new track for construction steel. The Ministry of Housing and Urban-Rural Development requires that by 2025, all newly built urban buildings will fully implement green building standards, and the promotion of ultra-low energy consumption buildings will be accelerated. Due to its advantages of fast construction, strong earthquake resistance, recyclability, and low carbon emissions, steel structure is becoming an important carrier of green construction. From 2020 to 2024, China's steel structure processing volume increased from 89 million tons to 109 million tons, with an average annual growth of 4.5%; China Steel Structure Association expects it to reach 140 million tons in 2025 and is expected to exceed 200 million tons by 2035.
+
+## II. Shift in Demand Focus: From All-round Expansion to Urban Agglomeration Focus
+
+Against the backdrop of total volume decline, the regional distribution of construction steel demand has also undergone significant changes. The past "blooming everywhere" construction model is being replaced by "key agglomeration". The meeting emphasized the need to develop modern urban agglomerations and metropolitan areas with a clustered and networked pattern, which means that future infrastructure investment will be highly concentrated in core regions such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area.
+
+Intercity railways, comprehensive transportation hubs, cross-river and cross-sea bridges, long tunnels and other major projects will become the main scenes of steel use. However, in third and fourth-tier cities and county areas with continuous population outflow, the growth space for construction steel demand is limited, and it may even face long-term shrinkage.
+
+A more far-reaching change is that the manufacturing industry is replacing the construction industry as the largest steel consumption sector. It is estimated that the proportion of construction steel in total steel consumption has decreased from 63.74% in 2020 to 56.99% in 2024, and the proportion of real estate steel consumption has even dropped sharply from 39.79% to 23.67%; during the same period, the proportion of steel consumption in the manufacturing industry has increased from 36.26% to 43.01% .
+
+This structural transformation has been confirmed at the steel mill production end: in 2024, the output of rebar and wire rod of key steel enterprises decreased by 13.84% and 1.73% year-on-year respectively; while the output of hot-rolled thin wide strip and cold-rolled thin wide strip increased by 3.14% and 1.95% respectively, and the growth rate of electrical steel plate (strip) and its cold-rolled varieties was as high as 7.75% and 5.41% respectively. The product structure is accelerating its tilt towards high value-added plates.
+
+## III. Industrial Upgrading: Coordinated Promotion of Technology, Green and Capacity Optimization
+
+The profound changes on the demand side are forcing the steel industry to accelerate upgrading in multiple dimensions.
+
+First, high-end products. Facing the transformation and upgrading of the manufacturing industry, steel mills are increasing the supply of new energy vehicle materials such as high-strength steel, silicon steel, and galvanized sheets; in response to the surge in renewable energy installation such as wind power and photovoltaics, the production capacity of special varieties such as medium plates, pressure vessel steel, and corrosion-resistant alloy steel continues to expand; at the same time, in line with the trend of lightweight and intelligent, functional products such as high-precision ship plates and stainless steel for home appliances are developed. In the construction field, green building materials such as high-strength seismic reinforcement and corrosion-resistant structural steel have also become research and development priorities.
+
+Second, the acceleration of green and low-carbon transformation. As of the end of July 2025, 147 steel enterprises in the country, with a crude steel production capacity of about 600 million tons, have completed the whole-process ultra-low emission transformation, accounting for a continuously increasing proportion of total production capacity. The industry goal is to achieve more than 80% of production capacity compliance by the end of 2025, and the internalization of environmental protection costs has become an important part of enterprise competitiveness.
+
+Third, the orderly withdrawal of backward production capacity. Facing the reality that real estate investment is still in double-digit negative growth, the policy level continues to strengthen the "anti-involution" orientation. The Central Financial and Economic Commission once again emphasized promoting the withdrawal of inefficient production capacity at the beginning of July, and in the future, traditional production capacity index transactions may be replaced by joint restructuring, and the sale of production capacity will be strictly prohibited, fundamentally improving the supply and demand relationship of the industry and enhancing resource allocation efficiency.
+
+## Conclusion
+
+The signals released by the Central Urban Work Conference clearly indicate that China's steel industry has officially entered a new development stage of "stock optimization and quality upgrading". The total demand for construction steel is irreversible, but structural opportunities such as urban renewal, green buildings, and urban agglomeration infrastructure are still considerable; while the rise of steel consumption in the manufacturing industry provides a more sustainable growth engine for the industry.
+
+Against this background, only enterprises that actively adjust their product structure, accelerate green and intelligent transformation, and resolutely eliminate backward production capacity can gain an advantage in the new round of reshuffle. The future of the steel industry no longer depends on "how much is produced", but on "what is produced" and "how it is produced". This industrial upgrading driven by demand changes is writing a new chapter in the high-quality development of China's steel industry.

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+title: The Great Significance of the Yarlung Zangbo River Project to the Steel Industry
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+
+At the hinterland of the Qinghai-Tibet Plateau, at the great bend of the Yarlung Zangbo River, a super hydropower project called the "Century Project" is拉开帷幕——this is the Yarlung Zangbo River downstream hydropower project (referred to as "Yarlung Project" or "Yaxi Project") with a total investment of 1.2 trillion yuan and a total installed capacity of 55 million to 60 million kilowatts. As the largest hydropower infrastructure project in human history, its annual power generation is expected to reach 200 billion to 300 billion kilowatt-hours, about 3 times that of the Three Gorges Project. This project will not only reshape the national energy pattern and support the "dual carbon" strategy, but also profoundly affect the development trajectory of China's steel industry.
+
+On August 27, 2025, at the 7th China High-Speed Steel Application Technology Forum, Zhao Fazhong, Deputy Secretary-General of China Special Steel Enterprise Association, delivered a report entitled "Yarlung Project and New Opportunities for the Development of the Steel Industry——Analysis of Steel and Special Steel Demand", systematically explaining the historical opportunities and structural challenges that the project brings to the steel industry.
+
+## I. Unprecedented Scale: The Largest Steel Demand in History
+
+It is estimated that the steel consumption for the main construction of the Yarlung Project is expected to reach 4 million to 6 million tons; if supporting power transmission, transportation, resettlement and other projects are included, the total steel consumption may exceed 8 million tons——10 to 13 times that of the Three Gorges Project (590,000 tons). More importantly, this demand is not released in a short period of time, but runs through a construction period of about 15 years, with a stable annual average of 500,000 to 800,000 tons, providing long-term, predictable market support for the steel industry.
+
+From the perspective of product structure, steel demand presents a dual-drive pattern of "conventional-based, special steel-essential":
+
+- Conventional building materials for core projects (2.8 million–3.3 million tons): including rebar, H-beams, I-beams, medium plates, etc., used for dam skeletons, diversion tunnels, construction roads and other infrastructure;
+- Special steel for transmission facilities (281,000 tons): such as weather-resistant angle steel, galvanized steel plates, used for UHV towers and substation steel structures;
+- Special steel for hydropower units (270,000 tons): covering corrosion-resistant stainless steel such as 06Cr13Ni4Mo, high magnetic induction oriented silicon steel sheets, high-strength structural steel, used for turbine runners, generator stators and rotors and other core components.
+
+It is worth noting that western steel enterprises are expected to become the main suppliers of conventional steel due to their geographical advantages. For example, Baowu Group Bayi Iron and Steel Co., Ltd. has a market share of 85% in the steel market for key projects in Tibet, relying on the Lanxin and Qinghai-Tibet Railways, its transportation costs are 30% lower than that of eastern enterprises, and its "local supply" advantage is significant.
+
+## II. Phased Release: Demand Rhythm Requires Flexible Response
+
+Zhao Fazhong pointed out that the steel demand of the Yarlung Project has distinct phased characteristics, putting forward new requirements for "flexibility" in the production organization and supply chain coordination of steel enterprises:
+
+- Early stage (2025–2027): mainly civil construction, with conventional building materials such as rebar and I-beams accounting for more than 60%; at the same time, it will drive an increase of 12% in steel demand for construction machinery, and orders for plateau tunnel boring equipment will surge.
+- Mid-term (2028–2030): entering the peak period of dam pouring and unit manufacturing, the annual demand for medium plates may exceed 5 million tons, silicon steel sheets increase by 150,000 tons per year, and Q500E and other high-strength bridge steel have expanded premium space——this is the "golden window period" for special steel enterprises.
+- Later stage (from 2031): focusing on the construction of UHV transmission lines, weather-resistant angle steel, galvanized steel and oriented silicon steel sheets (80,000 tons newly added annually) become the main force, emphasizing "precise docking" and "immediate response".
+
+This "front-heavy, rear-precise, from general to special" demand curve forces steel enterprises to shift from "batch production" to "customization on demand", and upgrade from "product delivery" to "solution provision".
+
+## III. Extreme Environment: Forcing Comprehensive Improvement of Material Performance
+
+The Yarlung Project is located on the Qinghai-Tibet Plateau at an altitude of more than 4,000 meters, facing multiple challenges such as extreme low temperature, strong ultraviolet rays, high-corrosion water quality, active earthquake zones, and limited transportation, putting almost harsh requirements on steel performance:
+
+- Low-temperature toughness: need to meet -40℃ impact energy ≥27J, promoting the application of Ni-Cr-Mo-V microalloying technology;
+- UV aging resistance: galvanized layer thickness ≥85μm, supporting new UV-resistant coating system;
+- Corrosion resistance: facing high chloride ion, high dissolved oxygen water body, nitrogen-containing duplex stainless steel becomes the key material;
+- Seismic and tear resistance: Z-direction steel is needed in geological fault zones, using online quenching + tempering process to improve lamellar tear resistance;
+- Lightweight and weldability: limited by plateau transport capacity (only 500 tons per day), requiring higher strength, lighter weight (30% weight reduction), and welding crack sensitivity index Pcm ≤0.30.
+
+Against this background, special steel accounts for as high as 40%, far exceeding conventional large-scale projects. This is not only a test of materials, but also a "pressure test" of China's steel industry's technical capabilities.
+
+## IV. Technological Leadership: From "Following" to "Running Side by Side" or Even "Leading"
+
+The Yarlung Project is becoming a "touchstone" and "accelerator" for domestic high-end steel. A number of landmark achievements have emerged:
+
+- Hunan Iron and Steel Group's HY950CF hydropower steel, with yield strength ≥960MPa, -40℃ impact energy >50J, successfully won 70% of the pressure steel pipe share (about 150,000 tons), achieving a 30% weight reduction;
+- Taiyuan Iron and Steel Co., Ltd. overcame the high-altitude welding deposition rate problem, exclusively supplying all 93 turbine runner steels (37,000 tons);
+- Baosteel will supply 140,000 tons of high-performance silicon steel, supporting the 233,000-ton generator core demand.
+
+These breakthroughs mark that China's special steel technology has reached the international advanced level and has the ability to independently guarantee national major projects.
+
+## V. Industrial Collaboration: Promoting Green and Intelligent Upgrading of the Whole Chain
+
+Zhao Fazhong emphasized that the Yarlung Project should not only be regarded as a "steel procurement project", but also as a strategic fulcrum to promote the high-quality development of the steel industry. He suggested:
+
+- Western steel enterprises can rely on geographical advantages to expand production capacity of plateau-adapted steel grades and layout electric furnace short-process projects;
+- Eastern enterprises can participate in the western supply chain through joint ventures;
+- Establish a "Yarlung Project special scrap steel" recycling system, combined with project green power resources, to create a low-carbon cycle demonstration;
+- Industry associations take the lead in integrating R&D, production, testing, logistics and other whole-chain resources to provide precise services.
+
+China Special Steel Enterprise Association has listed the Yarlung Project as a top priority, personally deployed by the association's leaders, aiming to gather industry synergy and escort the implementation of national strategies with special steel strength.
+
+## VI. Action Initiative: Steel Enterprises Must Take the Initiative
+
+Facing this once-in-a-lifetime opportunity, Zhao Fazhong issued a call to the entire industry:
+
+- Establish a special working group: set up a "Yarlung Project Steel Leading Group" to systematically plan technology, production capacity and market strategies;
+- Deeply connect with owners and contractors: actively contact key units such as China Yarlung Group, China Power Construction, Dongfang Electric, Datang Group, Tibet Tianlu, etc.;
+- Strengthen technology R&D: accelerate the development of high-strength, corrosion-resistant, lightweight steel for special working conditions such as plateau, cold, and high corrosion;
+- Build an exclusive supply chain: realize the whole process quality traceability and guarantee from iron ore to finished steel;
+- Build a brand highland: take the Yarlung Project as a core platform to showcase technical strength, cultivate high-end talents, and establish industry benchmarks.
+
+## Conclusion: Casting the "Steel Backbone", Writing a Hardcore Answer Sheet
+
+"The steel skeleton of the Yarlung Project is waiting for us to improve with more sophisticated technology and protect with a more rigorous attitude." Zhao Fazhong sincerely sent a message at the end of the report.
+
+For the steel industry, the Yarlung Project is not only a huge order list, but also a historic battle related to transformation and upgrading, technological leap and global competitiveness reshaping. Every improvement of steel standards is to build a safe bottom line for the century project; every breakthrough of technical bottlenecks is to inject new kinetic energy into made in China.
+
+On this roof of the world, Chinese steel people will work together to cast the steel backbone of this "super project" with solid products, tough technology and steady action, and write a hardcore answer sheet belonging to China's industry in the new era.

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+title: The Development of China's Steel Industry Urgently Needs High-end Transformation
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+
+As the end of the year approaches, the steel industry is experiencing a critical stage of structural adjustment and transformation. Although the overall output remains relatively stable, demand continues to be under pressure, inventory levels have risen significantly, and the industry's profit foundation is still fragile. However, amid challenges, some enterprises have achieved counter-trend growth through measures such as focusing on high-end products, optimizing structure, reducing costs and increasing efficiency, providing a new path for high-quality development of the industry.
+
+## (I) Demand Declines, Inventory Pressure Emerges
+
+According to the latest data from the China Iron and Steel Association (CISA), the apparent consumption of steel in China in the first three quarters of 2025 was 649 million tons, a year-on-year decrease of 5.7%. This trend is not a short-term fluctuation, but a continuous change since the "14th Five-Year Plan"—since the peak consumption of 1.04 billion tons in 2020, China's apparent steel consumption has declined for five consecutive years, falling to 890 million tons in 2024, a cumulative decrease of 150 million tons, with an average annual decline of 3.8%.
+
+At the same time, inventory pressure is gradually accumulating. Research reports from Cinda Securities show that as of November 28, 2025, the social inventory of the five major steel varieties reached 10.073 million tons, a significant year-on-year increase of 27.82%; factory inventory was 3.935 million tons, a year-on-year increase of 2.11%. Data from CISA shows that in mid-November, the steel inventory of key statistical steel enterprises was 15.61 million tons, an increase of 3.24 million tons compared with the beginning of the year, an increase of 26.3%, reflecting the phased mismatch between weak end demand and production rhythm.
+
+## (II) Output is Stable with Adjustments, Structural Differentiation Intensifies
+
+From the production side, the steel industry as a whole is operating smoothly. In mid-November 2025, the average daily output of crude steel of key statistical steel enterprises was 1.943 million tons, a slight increase of 0.9% month-on-month; the average daily output of steel was 1.924 million tons, an increase of 2.1% month-on-month. But looking back to October, the country's crude steel output was 72 million tons, a year-on-year decrease of 12.1%, and the cumulative output from January to October was 818 million tons, a year-on-year decrease of 3.9%. This indicates that under policy guidance and market regulation, the trend of the industry actively reducing production continues.
+
+It is worth noting that although the total output has declined, the production and sales ratio of high-end steel products is increasing. A number of listed companies disclosed in their announcements that by increasing the proportion of special steel and high value-added products, they effectively hedged the impact of falling prices of ordinary steel, and some enterprises even turned losses into profits. According to the third quarterly report data, among the 46 steel listed companies that have disclosed their performance, 31 have achieved year-on-year growth in net profit, accounting for 67.39%.
+
+## (III) Profit Improvement but Fragile Foundation, Industry Still in Transformation Pain Period
+
+Xia Nong, vice president of CISA, pointed out at the 21st China Steel Industry Chain Summit that since 2025, the industry has been operating well overall, with significantly improved benefits compared with the same period last year, and achieved a turn from loss to profit in September. However, from a month-on-month perspective, the profit level in September fell sharply compared with August, indicating that the current profit foundation is still not stable, and the industry is still in a stage of "weak recovery and strong differentiation".
+
+This judgment is highly consistent with the current supply and demand pattern: on the one hand, traditional steel-consuming fields such as construction and real estate continue to shrink; on the other hand, emerging application scenarios such as new energy, high-end manufacturing, and steel structure buildings have not yet formed sufficient incremental support.
+
+## (IV) Transformation and Upgrading are the Key to Breaking the Situation, Green and Intelligence Lead the Future
+
+Facing the new development stage of "stock optimization and quality upgrading", CISA emphasizes that steel enterprises must firmly implement the "three determinations and three don'ts" business principles (i.e., determine production based on sales, determine production based on efficiency, determine production based on cash, do not blindly expand production, do not engage in vicious competition, do not sacrifice long-term interests), strengthen industry self-discipline, and curb "involution-style" competition.
+
+Xia Nong put forward five suggestions for high-quality development:
+
+1. Deepen supply-side structural reform, control increments, optimize stocks, and promote merger and restructuring;
+
+2. Promote high-end, intelligent, green, and integrated development, and enhance the competitiveness of the entire industry chain;
+
+3. Strengthen iron ore resource development and scrap steel utilization to ensure industrial chain security;
+
+4. Expand new application scenarios such as steel structure buildings to activate potential demand;
+
+5. Enhance internationalization level and integrate into the global industrial chain.
+
+In terms of green transformation, the industry has made solid progress. As of the end of October 2025, 219 steel enterprises across the country have completed or partially completed ultra-low emission transformation, of which 165 have achieved full-process transformation, covering about 663 million tons of crude steel production capacity, with a total investment of over 310 billion yuan. The average environmental protection operation cost per ton of steel has reached 212.44 yuan, and green has become a hard constraint and new advantage for industry development.
+
+In addition, the construction of extreme energy efficiency is also accelerating. As of mid-November, 21 enterprises have completed extreme energy efficiency acceptance, 10 have been recognized as "double carbon best practice energy efficiency benchmark demonstration enterprises", and 11 others have established energy efficiency benchmarks in key processes or equipment.
+
+## (V) Outlook: Innovation-driven, Boundary Expansion
+
+Li Daokui, Dean of the Institute of Chinese Economic Thought and Practice at Tsinghua University, suggests that steel enterprises should accelerate technological innovation, actively lay out new energy-related material fields, and vigorously promote the application of steel structure buildings. He also calls for strengthening government-enterprise collaboration, promoting internationalization at a more steady pace, and forcing internal reform and capacity improvement through high-level opening up.
+
+It can be predicted that driven by the dual drivers of the "dual carbon" goal and high-quality development, the steel industry is shifting from scale expansion to value creation. Those enterprises that take the lead in completing product upgrading, green transformation, and market expansion will win opportunities in the new round of reshuffle. And the entire industry will reshape its competitiveness in the pain and move towards a more sustainable future.