Posted on 20 Jun 2025
Chinese steelmakers should actively optimize their product structure and target end-users in sectors with rising potential, as the country's real estate sector remains in a period of deep adjustment, and steel demand from this sector is gradually diminishing, according to Mysteel's report released on June 18.
The central government's many adjustment measures to recover the real estate sector – such as easing purchase restrictions, reducing interest rates and absorbing existing housing inventory – have helped slow the decrease in property sales, the report notes. Nevertheless, the policy impact on investment and construction activities remains limited, it acknowledges.
Statistics from the country's National Bureau of Statistics (NBS) showed that over January-May, property sales by floor area across the country reached 353.15 million sq m, down by a much smaller 2.9% compared with the 20.3% plunge during the first five months of last year. However, investment in the property market still fell by 10.7% on year during January-May, and the total area of newly-launched property projects slumped further by 22.8% on year, the NBS data also show.
The deep and prolonged adjustment of China's real estate market has led to a steady decline in steel consumption from this sector, the report pointed out. On the other hand, steel demand for manufacturing has been increasing gradually, mainly thanks to the better performance of industries such as machinery and automobile manufacturing and shipbuilding, it noted.
Therefore, Chinese steelmakers are allocating more hot metal to produce high-value-added steel products such as flats, and their production of construction steel including rebar and wire rod has declined.
Mysteel's data showed that from January to May, total output of rebar from the steel mills it tracks nationwide reached 46.73 million tonnes, accounting for 25% of their total production of the five major steel products – namely rebar, wire rod, hot-rolled coil (HRC), cold-rolled coil (CRC), and medium plate. This proportion was significantly lower than the 33.8% recorded in 2020.
During the first five months of this year, the sampled mills' HRC production accounted for 37.5% of the total, surpassing rebar to become the dominant steel product.
The report warned that further expansion in HRC capacity may lead to renewed competitive pressures, while the continuous advancement of high-end and intelligent manufacturing processes may boost the production of higher value-added steel products.
Source:Mysteel Global
