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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.