Profits in China’s steel industry were halved in 2024 due to weak demand, prompting the China Iron and Steel Association (CISA) to urge producers to limit overproduction and avoid price wars, according to a report.
Key enterprises monitored by CISA reported annual profits of around USD 5.9 bln, down 50pct from 2023. Revenues dropped 6pct to nearly USD 825 bln, and the average profit margin fell from 1.34pct to 0.71pct.
CISA Chairman Yao Lin highlighted a severe imbalance between supply and demand, exacerbated by insufficient self-discipline in controlling capacity expansion. He warned that ongoing competition and market disruptions have led to a prolonged decline in industry performance.
Yao emphasized the need for companies to assess the industry’s development stage more accurately, strengthen self-discipline, and avoid harmful competition.
The industry has struggled with sluggish demand, partly due to the real estate downturn. After peaking at 1.05 bln tons in 2020, crude steel consumption has fallen for four consecutive years, dropping to 892 mln tons last year, according to CISA data.
Despite declining demand, production has remained stubbornly high, with crude steel output staying around 1 bln tons in 2024, as reported by the National Bureau of Statistics. To stimulate demand, China plans to expand domestic consumption through more proactive fiscal policies and moderately loose monetary measures.
The China Metallurgical Industry Planning and Research Institute predicts growth in steel demand from sectors like machinery, automotive, and energy, while demand from construction, railways, and containers is expected to continue declining.
