According to China Metallurgical News, China's stainless steel industry is currently at a critical juncture of transitioning from scale expansion to quality enhancement, presenting both opportunities and challenges. The industry must earnestly implement the core tasks of “combating internal competition, promoting coordinated development, and ensuring stable growth.” With technological innovation as the primary driver and enhancing the resilience and security of the industrial chain as the focal point, efforts should be made to propel the industry's transformation from scale expansion to quality and efficiency, and from the mid-to-low end to the high end of the value chain. This will foster consensus and pool collective strength to achieve higher-quality and more sustainable development for the sector.
In the first three quarters of this year, the global stainless steel industry exhibited characteristics of “intensified regional divergence and accelerated green transformation,” entering a new phase where development is driven by technological innovation and sustainability rather than solely by cost and scale. Concurrently, domestic downstream demand has undergone significant shifts: emerging sectors like new energy and environmental protection equipment have seen demand growth, while traditional areas such as architectural decoration have experienced slower demand expansion. Fluctuations in nickel and chromium raw material prices, along with substitution by materials like non-ferrous metals, have amplified impacts on the industry. Facing dual challenges from a complex and volatile international market environment and domestic structural adjustments, China's stainless steel industry has focused on core tasks. Amid pressures including raw material price fluctuations, slowing demand growth, and international trade frictions, it has actively expanded into new application areas.
Positive Changes in Stainless Steel Industry During First Three Quarters
Guided by policy, China's stainless steel industry actively promoted industrial restructuring during the first three quarters of this year, gradually shifting from scale expansion to quality enhancement. Positive changes emerged in production capacity, technological innovation, green and low-carbon development, and internationalization.
Regarding production and consumption, the industry has actively adapted to shifts in downstream demand while continuously optimizing its product mix. In terms of output, China's crude stainless steel production reached 30.4618 million tons in the first three quarters, marking a 4.77% year-on-year increase. Annual production is projected to exceed 40 million tons, representing a growth of approximately 3% to 5%. Specifically, the production share of 300-series stainless steel increased to 51.28%, while that of 400-series decreased to 18.33% and 200-series fell to 29.25%. The production share of duplex stainless steel rose to 1.14%. In consumption, China's apparent consumption of stainless steel reached 24.9123 million tons in the first three quarters of this year, up 3.77% year-on-year. Emerging sectors such as new energy vehicles, hydrogen energy, and lithium batteries continue to drive demand growth for stainless steel, emerging as new growth drivers for steel demand. Traditional sectors like stainless steel pipes for construction, high-performance stainless steel for food machinery, and steel for shipbuilding and marine engineering are steadily recovering. Overall, the market exhibits characteristics of “emerging sectors expanding volume while traditional sectors stabilize the base.”
Regarding production capacity, continuous growth indicates intensifying market competition. By the end of 2024, China's stainless steel capacity exceeded 50 million tons. With the anticipated completion and commissioning of Zhen Shi Group's Dongfang Special Steel 2.5 million-ton stainless steel project by year-end, domestic capacity will further expand. Against the backdrop of global stainless steel supply surplus, both domestic and international markets will face fiercely competitive conditions, with capacity utilization rates under widespread pressure.
Regarding corporate profitability, significant divergence in performance is evident and intensifying. During the first three quarters of this year, high raw material costs—primarily for nickel and chromium—combined with persistently depressed stainless steel prices placed the entire industry under pressure. Average profit margins remained low, with most enterprises facing dual pressures of high costs and market competition, operating at marginal profitability or near break-even. Leading enterprises like TISCO Stainless Steel and JiuLi Special Materials achieved profit growth through high-value-added products. Resource-based companies such as Tsingshan and Zhen Shi Dongfang maintained robust profitability. Meanwhile, JiuGang HongXing and Beigang New Materials enhanced efficiency and reduced costs through process optimization, resource recycling, and artificial intelligence. From the perspective of technological innovation, China's stainless steel industry has achieved breakthroughs across multiple fronts in technological advancement. On the materials front, the localization of key strategic steel materials is accelerating.
Regarding green and low-carbon development, the industry's transformation pace is quickening, with related standards systems gradually improving. For instance, the carbon footprint of TISCO's first batch of 304L stainless steel medium plates decreased by over 75% compared to traditional processes, meeting the requirements of the EU Carbon Border Adjustment Mechanism (CBAM) and successfully entering international markets.
Regarding raw materials, tightening resource constraints may ease, though uncertainties persist. China has long relied heavily on foreign chromium and nickel resources. To mitigate supply chain risks, China has signed long-term chromium ore supply agreements with countries like Zimbabwe. Additionally, China's accumulated scrap steel stockpile has surpassed 1 billion tons, with new shifts in its supply structure emerging. The proportion of scrap steel from traditional building demolition is gradually declining, while the share of industrial manufacturing waste and recycled resources like end-of-life vehicles and appliances continues to rise. Scrap steel from automobile dismantling now accounts for over 28%, becoming a significant new source of scrap steel.
Internationally, amid escalating trade frictions, market diversification has accelerated. Rising global protectionism in recent years has seen countries like South Korea, Japan, and India launch anti-dumping investigations against Chinese stainless steel products, while U.S. tariff hikes have significantly impacted both direct and indirect exports of Chinese stainless steel. To counter trade barriers, the industry has actively expanded into “Belt and Road” markets, achieving notable export growth to Vietnam, Saudi Arabia, and other countries. It has also strategically deployed overseas production capacity, such as establishing bases and investing in projects in Indonesia and Turkey, while stimulating export growth through free trade agreements.
As an integrated internet platform providing benchmark prices,on December 2nd, the benchmark price of stainless steel coils from SunSirs was 12,485.00 RMB/ton, unchanged from the beginning of the month.
Application of SunSirs Benchmark Pricing：
Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).
If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.
