Source:China Industrial Economic Information Network
On April 16th, the National Bureau of Statistics released the macroeconomic data for the first quarter of 2025 and March. These data provide a crucial perspective for us to analyze the latest trends in the steel industry. This article will start from two aspects: production,and exports, and guide you to review the current fundamental situation of China's steel industry.
01 Production side: Steel output has rebounded, and the operating rate of blast furnaces remains at a high level
In the first quarter of 2025, China's crude steel output was 259 million tons, increasing by 1.1% year-on-year. The increase in output was mainly driven by a 5% year-on-year growth in March alone. Meanwhile, the capacity utilization rate of blast furnaces in long-process steel mills has remained at a high level, reflecting that against the backdrop of a slight recovery in steel prices, steel enterprises hope to increase their revenue by enhancing capacity utilization.
However, the capacity utilization rate of electric arc furnaces (EAF) has yet to show a significant recovery, and it is rather difficult to achieve the goal of "electric furnace steel accounting for 15%" throughout the year.
Key points of observation: The high operating rate of blast furnaces is mainly driven by profit motives rather than structural improvement. The slow development of electric furnaces indicates that the green transformation of the industry still faces practical resistance.
02 Export Side: Export volume remains at a high level, but prices are under pressure.
In the first quarter of 2025, China's steel export volume reached 27.4 million tons, increasing by 6.3% year-on-year. However, the average export unit price decreased by 11% year-on-year, reflecting the phenomenon of "increased volume and decreased price" in exports caused by the imbalance between domestic supply and demand.
Key observation points: Maintaining a high level of exports has helped some steel enterprises relieve inventory pressure. The decline in export prices means that the profit margin has been further squeezed.
03: Summary: The industry is beginning to recover, but structural challenges cannot be ignored.
Although production has gradually picked up and exports have remained resilient, the steel industry as a whole still faces the predicament, thin profits and heavy structure". Especially against the backdrop of the continuous weakening of the real estate market and the decline in export profits, the industry needs to be vigilant against the risk of misjudgment brought about by the "false heat" of recovery. Meanwhile, as the national carbon market expands and the "carbon peak" goal approaches, high-carbon assets are facing the risk of being shelving. Only by adjusting their strategies as soon as possible and taking technological upgrading, structural reform and green transformation as their core competitiveness can steel enterprises stand firm in the new round of global changes.
Email:alvin.zhu@evergrowrs.com