At present, the global steel market is in a weak balance between supply and demand. Affected by multiple factors such as domestic policy regulation, international trade frictions, and low-carbon transformation, the industry presents the characteristics of "low inventory, low price, low demand, and high supply elasticity".

The following is an analysis of the main status quo:

1,Price trend: oscillating downward, involution intensified

In the first half of 2025, steel prices continued to fall, mainly affected by shrinking real estate demand, falling prices of raw materials (iron ore, coking coal) and blocked exports.

After June, it entered a oscillating stage, showing a "weak reality, strong expectations" pattern, that is, actual demand is weak (real estate is sluggish, construction is restricted in the rainy season), but policy expectations (infrastructure stimulus, special bonds accelerated) support the bottom of the price.

If the production reduction policy is not implemented effectively, the price of rebar and hot-rolled coil may fall below 3,000 yuan/ton; if the production restriction is strictly implemented, the gross profit per ton of steel is expected to rise to around 400 yuan.

2,Supply and demand pattern: strong supply and weak demand, exports under pressure

Supply side: domestic steel mills have a stronger willingness to resume production after profitability recovery, but the policy requires continued implementation of crude steel output control, strictly prohibits new production capacity, and promotes low-carbon transformation (such as hydrogen metallurgy and electric furnace steelmaking).

Demand side:

Construction industry (decreased proportion): new real estate construction is expected to fall by 18% year-on-year, dragging down demand for construction steel.

Manufacturing (accounting for nearly 50%): steel consumption in high-end manufacturing industries such as new energy vehicles, wind power, and shipbuilding has increased, but the growth rate of home appliances and automobiles has slowed down due to export tariffs.

Export: Affected by the US's 50% steel tariff and Southeast Asian anti-dumping investigations, net exports in 2025 are expected to decrease by 21 million tons year-on-year.

3,Policy impact: production restrictions and low-carbon transformation in parallel

Crude steel reduction: The policy requires continued production cuts in 2025. If strictly implemented (such as a 50 million ton reduction), industry profits are expected to recover; if poorly implemented, oversupply will intensify.

Carbon emission reduction: The steel industry will be included in the national carbon market, and the first compliance will be completed by the end of 2025. Ultra-low emission transformation will cover 80% of production capacity, promoting the development of green steel.

4, Industry profits: obvious differentiation, special steel performs better

General steel: dragged down by real estate, profits are under pressure, it is recommended to pay attention to high dividend leaders (such as Baosteel).

Special steel: benefiting from the growth in demand for high-end manufacturing (new energy, aerospace, shipbuilding), the valuation of mid-to-high-end special steel (such as CITIC Special Steel and Jiuli Special Materials) is expected to increase.

5,Future Outlook: The second half of the year may continue to be under pressure

Price: It is expected that the center of gravity of steel prices will move downward in the second half of 2025, and the average price for the whole year will drop by 10.5% year-on-year.

Risk points:

The implementation of domestic production restriction policies

Overseas trade protectionism escalation (such as US tariff policies)

Real estate recovery is less than expected.

Conclusion

The steel market will still face supply and demand contradictions in 2025, and the industry's profitability depends on policy regulation and high-end transformation. In the short term, if production cuts are strictly implemented, profits are expected to recover; in the long term, special steel and green steel will become the main growth points.

Faced with the severe situation of steel market development in the first half of 2025, Sylaith Special Steel Co., Ltd. will continue to forge ahead, continuously strengthen the transformation and upgrading of the industry, actively carry out industrial innovation while improving product quality, respond to trade challenges with technological innovation, focus on emerging markets, optimize export structure, and promote sustainable development enabled by green steel.

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