Abstract According to a report from China Voice’s "National News Network," the China Steel Association revealed that the inventory of steel products held by its member companies has surpassed 14.5 million tons, setting a new record high and signaling that a major transformation in the industry is on the horizon. This comes as the sector continues to face significant challenges, with overcapacity remaining a central issue.
The China Steel Association's outlook for this year suggests a shift from the severe conditions seen last year, expecting a period of stable growth. This prediction is based on several factors: an increase in the supply of raw iron ore, a likely decline in prices, and a moderate rise in demand for steel from sectors such as railways, urban infrastructure, and rail transit.
Xu Yongbo, an analyst at Treasure Island Steel, noted that steel prices reached a peak during the second quarter of this year. He also pointed out that the new government may introduce supportive policies, including initiatives related to high-income housing, urbanization, and high-tech industries, which could help boost domestic demand. However, despite some improvements, the industry still grapples with massive inventory pressures.
Recent data shows that in early March, the average daily output of crude steel exceeded 2.08 million tons, another record high. Although production has slightly declined, it remains at elevated levels.
Yu Yong, general manager of Hebei Iron and Steel Group and chairman of Tangshan Iron and Steel Group, warned that the most difficult phase of the industry has not yet arrived. He emphasized that while supply and demand are currently balanced, many steel companies are not profitable due to low margins. The real challenge lies in the fact that certain products may struggle to find buyers once demand patterns change.
Yu argued that simply expanding capacity or competing on cost is no longer a sustainable strategy. In an environment where low returns have become the norm, he urged companies to focus on internal restructuring. He called for a comprehensive review of the quality and efficiency of large-scale operations, addressing structural issues, improving product quality, and rethinking business models to ensure long-term survival and competitiveness in the evolving market.
The China Steel Association's outlook for this year suggests a shift from the severe conditions seen last year, expecting a period of stable growth. This prediction is based on several factors: an increase in the supply of raw iron ore, a likely decline in prices, and a moderate rise in demand for steel from sectors such as railways, urban infrastructure, and rail transit.
Xu Yongbo, an analyst at Treasure Island Steel, noted that steel prices reached a peak during the second quarter of this year. He also pointed out that the new government may introduce supportive policies, including initiatives related to high-income housing, urbanization, and high-tech industries, which could help boost domestic demand. However, despite some improvements, the industry still grapples with massive inventory pressures.
Recent data shows that in early March, the average daily output of crude steel exceeded 2.08 million tons, another record high. Although production has slightly declined, it remains at elevated levels.
Yu Yong, general manager of Hebei Iron and Steel Group and chairman of Tangshan Iron and Steel Group, warned that the most difficult phase of the industry has not yet arrived. He emphasized that while supply and demand are currently balanced, many steel companies are not profitable due to low margins. The real challenge lies in the fact that certain products may struggle to find buyers once demand patterns change.
Yu argued that simply expanding capacity or competing on cost is no longer a sustainable strategy. In an environment where low returns have become the norm, he urged companies to focus on internal restructuring. He called for a comprehensive review of the quality and efficiency of large-scale operations, addressing structural issues, improving product quality, and rethinking business models to ensure long-term survival and competitiveness in the evolving market.
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