Posted on 25 Jul 2025
Southwest China's massive Yarlung Zangbo hydropower project, where ground was formally broken on July 19, is expected to significantly boost domestic demand for special steel, presenting transformative opportunities for the domestic special steel sector's advancement, according to a release of China's Special Steel Enterprises Association (SSEA) on July 24.
The association convened a seminar in Beijing on July 23, focusing on the opportunities and challenges presented by the massive project.
Experts attending the seminar estimated that the project's demand for special steel alone may reach 4–6 million tonnes, unprecedented for an infrastructure project in China and far exceeding the needs of similar hydropower projects such as the Three Gorges Dam, the release showed.
The hydropower project on the lower reaches of the Yarlung Zangbo River will consist of five cascade hydropower stations and will primarily deliver electricity for external consumption while also addressing local demand in Southwest China's Xizang Autonomous Region, as reported. Total investment is estimated at around Yuan 1.2 trillion ($168 billion).
The dams are being constructed in an extreme environment, characterised by severe cold, high altitude, and highly corrosive conditions, the SSEA release noted, requiring steel products with enhanced performance of strength, corrosion resistance, and durability.
Many listed steel producers in China have indicated their intention to seize the opportunity the mega-project offers and actively participate in the bidding process for supply contracts, according to Mysteel's survey.
Market sentiment has been buoyed this week by the project's anticipated steel demand, as Mysteel Global has reported. The Xizang dam project, and the central government's comments regarding stabilizing industry growth and eliminating excessive competition, have boosted steel market confidence, driving a noticeable uptick in finished steel prices.
For example, on July 23 Mysteel assessed China's national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, at Yuan 3,441/tonne ($481/t) including the 13% VAT, rising by Yuan 230/t from the end of June and marking a new high since March 3.
The same day, the national average price of Q235 4.75mm hot-rolled coil under Mysteel's assessment came in at Yuan 3,489/t including the 13% VAT, rising by Yuan 258/t from the end of June.
Source:Mysteel Global
