In recent years, the steel industry, as a pillar industry of the national economy, has been facing the intertwined influence of multiple complex factors. At the beginning of 2025, amid ongoing volatility, the steel industry continued to seek breakthroughs and transformation.
From the perspective of the global economic situation, the growth forecast for 2025 is not optimistic. In the World Economic Outlook Report released in October 2024, the International Monetary Fund (IMF) forecasted a global GDP growth rate of 3.2% for 2025, mirroring the previous year's performance. Goldman Sachs' forecast is more pessimistic, believing that the global GDP growth rate will be only 2.7%. Against this background, the demand growth in the steel industry is under pressure. In particular, the further tension in Sino-US relations may lead to higher tariffs and more bans on China's steel exports, further affecting the export benefits of steel companies.
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On the domestic front, the steel industry also faces many challenges. Data from the National Bureau of Statistics show that the total profit of ferrous metal smelting and rolling processing industry in 2024 fell sharply, down 80.4% year-on-year. In 2025, the overcapacity pressure in the steel industry is still large, but upstream iron ore prices may decline due to the increase in supply, and steel cost constraints are expected to gradually improve. However, the long-term downturn in the real estate market and the decline in the number of new projects and projects under construction have made it difficult to see a significant improvement in the demand for construction steel.
Despite these challenges, the steel industry has still embraced new development opportunities. With the increase in the number of countries participating in the "Belt and Road" initiative, as well as the implementation of large-scale equipment renewal and consumer goods replacement policies in China, the steel industry is expected to gain new growth points. At the same time, the monetary easing policy, stabilizing the property and stock markets, and increasing fiscal spending proposed by the Central Economic Work Conference will also provide policy support for the steel industry.
On the supply side, the environmental protection and production restriction policy is still in effect, which has imposed certain restrictions on the production activities of steel mills. In 2024, the Ministry of Industry and Information Technology will suspend the implementation of steel capacity replacement, and it will be difficult for steel supply to increase in 2025. The optimization of stock capacity driven by policies will be further accelerated. In addition, the steel industry has been included in the national carbon emission trading market, and differentiated production cuts are imperative. These factors work together to make steel production likely to decline slowly in the next few years.
On the demand side, demand in industries such as infrastructure construction, automobiles, shipbuilding, containers, oil and gas pipelines, home appliances and machinery will continue to pick up, effectively buffering the impact of the weak real estate market on the overall demand for steel. In particular, with the country's continued investment in infrastructure construction and the steady development of the manufacturing industry, the demand for high-quality steels such as special steel and high-strength steel will increase.
Overall, in 2025, the steel industry willcontinue to grapple with a weak supply and demandbalance, yet the industry's profitability is anticipated to improve. Iron and steel enterprises need to stabilize production at the same time, actively find new development paths, through scientific and technological innovation, green transformation and other ways to enhance competitiveness. At the same time, upstream and downstream enterprises in the industrial chain need to strengthen communication and cooperation to jointly cope with the challenges brought by market uncertainties. Exploring new opportunities for development amid challenging conditions, the steel industry is poised to welcome new development opportunities.
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