Posted on 29 Apr 2026
The profits that China's steel industry earned from its main business – steel – contracted significantly by 86% in the first quarter of 2026, mainly due to a worse-than-expected drop in steel demand as well as high raw material costs, the China Iron and Steel Association (CISA) pointed out on the five-party working conference held in Beijing on April 27.
Attending the meeting were representatives from the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, the Ministry of Commerce and CISA.
During the first three months of this year, Chinese steelmakers implemented self-disciplined production controls that resulted in a steady decline in national crude steel output, CISA highlighted at the meeting. Specifically, the tonnage for January-March totaled 247.55 million tonnes, representing a 4.6% on-year decline, according to data from National Bureau of Statistics.
But domestic steel demand contracted at an unexpectedly faster pace in the first quarter, offsetting the production decline and resulting in steady inventory accumulation over the period that eventually placed pressure on finished steel prices, CISA observed.
Finished steel stocks held by CISA member mills and commercial warehouses in the 21 cities the association regularly checks mounted by 17% and 58.4% respectively compared with the level in the beginning of this year, data from the association showed.
The meeting stressed that soaring prices of steelmaking raw materials had served as another major contributor to the industry's serious profit contraction. This can be primarily attributed to the ongoing Middle East tension which has raised coal prices, transportation costs and iron ore mining costs, CISA noted.
Given the current situation, the conference urged the entire industry to exercise self-discipline in controlling steel output and lowering steel stocks to dampen fluctuations in finished steel prices.
The meeting also called on the industry to make efforts to rein-in rising production costs to secure sustainable profitability. Furthermore, it recommended that relevant national policies be clarified as soon as possible to actively guide market expectations.
Source:Mysteel Global
