The steel industry is a vital foundational sector in China. In recent years, as the industry has been undergoing a period of profound restructuring and transformation, how has it been building new-quality productive forces?

In recent years, China’s steel industry has focused on promoting the development of new and high-quality product varieties, continuously enhancing its supply capacity for high-end materials. During the 14th Five-Year Plan period, the industry has continued to increase investment in innovation; in 2025 alone, nearly 20 new steel products were launched globally for the first time.

Supply creates demand, and demand drives supply. Each new high-end product bears witness to the shifting structure of China’s steel demand. In 2025, the share of steel used in the construction sector fell from 58% in 2020 to 49%, while the share used in manufacturing rose from 42% to 51%.

“For the first time in China’s history, steel consumption in the manufacturing sector has surpassed that in the construction sector. This is the result of the steel industry proactively adapting to changes in demand and driving product quality upgrades,” said Jiang Wei, Vice President and Secretary-General of the China Iron and Steel Association. During the 14th Five-Year Plan period, China’s steel self-sufficiency rate has essentially reached 100%, ensuring high-quality and high-level support for the national economy’s demand for steel.

Intelligent Systems for Steelmaking: Full-Process Application of AI Technology

Artificial intelligence technology has been applied to all aspects of steel production, manufacturing, and operations, significantly accelerating the industry’s transition to smart manufacturing. Among the key enterprises tracked by the China Iron and Steel Association, 95% have incorporated digital transformation strategies into their overall development plans, and steel smart manufacturing is shifting from “isolated exploration” to “systematic advancement.”

“As a vital foundational industry for the national economy, the steel sector possesses a rich data foundation and diverse industrial application scenarios, making it an ideal testing ground for the deep integration of next-generation AI,” said Zhang Longqiang, President of the Metallurgical Industry Information and Standards Research Institute. He added that “AI+Steel” holds even broader development prospects for the future. As large-scale model technologies are deeply integrated into the entire steel production process, the industry’s level of intelligence will be further enhanced.

Production Cuts Exceeding 100 Million Tons: Results of “Anti-Involution” Continue to Emerge

A single set of data offers insight into the operational efficiency of the steel industry over the past year: In 2025, the total profit of key enterprises tracked by the China Iron and Steel Association reached CNY115.1 billion, a 140% year-on-year increase. Of this, the core steel business generated a profit of CNY 44.5 billion, marking a turnaround from loss to profit.

In 2025, despite declining domestic demand and a complex and severe external trade environment, the steel industry maintained stable operations, with output decreasing year-on-year and profitability significantly improving.

The improvement in the steel industry’s profitability was driven by a decline in raw material costs, but it was also made possible by the self-discipline of steel enterprises in controlling production and stabilizing prices, as well as the continuous advancement of modern industry governance.

Data supports this: In 2025, national crude steel output stood at 961 million tons, a 4.4% year-on-year decrease. During the 14th Five-Year Plan period, the steel industry actively explored new capacity management mechanisms aligned with market principles to promote industrial transformation and upgrading as well as the survival of the fittest, continuously reducing production by over 100 million tons. The industry’s layout was further optimized, and the effectiveness of “anti-overcapacity” measures continued to manifest. In 2025, the steel industry’s CR10 (the concentration ratio of the top 10 steel enterprises) reached 43.1%, an increase of 4.2 percentage points compared to 2020.

Looking ahead, major steel-consuming industries will maintain stable operations, and the steel industry is well-positioned to achieve high-quality and profitable development. Specifically, the real estate sector is shifting its focus toward the construction of “quality housing,” with increased supply of affordable and improved housing and the orderly advancement of urban renewal. The manufacturing sector is placing greater emphasis on quality improvement and upgrading; traditional steel-consuming industries such as machinery, automobiles, shipbuilding, home appliances, and equipment will continue their trend of steady growth. Meanwhile, emerging industries such as new energy, the low-altitude economy, and artificial intelligence are creating new growth points for steel demand.

This year marks the beginning of the 15th Five-Year Plan. Jiang Wei stated that during the process of reducing production capacity and optimizing existing capacity, the industry must maintain strategic resolve, prevent “involution-style” competition, and focus on the goals of high-end, intelligent, and green development. By doing so, the steel industry will surely achieve high-quality development within a dynamic balance of supply and demand at a higher level.

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