Source: China Iron and Steel Association (CISA) / Securities Times / 21st Century Business Herald
The China Iron and Steel Association (CISA) held its third-quarter information briefing in Beijing on October 30, 2026, delivering a sober assessment of the domestic steel market. Tang Zujun, CISA vice chairman and chief spokesperson, said the industry has been operating under a pattern of excess supply against weak demand, elevated inventories, depressed prices, rising costs and deteriorating earnings. Total profit among key statistical steel enterprises fell 27.4 percent year on year to 71.8 billion yuan in the first nine months, with the sales profit margin slipping to 1.57 percent. Profit from the core steelmaking business collapsed 75.2 percent to 12.6 billion yuan, and 29.6 percent of the surveyed enterprises were loss-making, up 11.4 percentage points from a year earlier.
The supply-demand imbalance remains the sector's central contradiction. National crude steel output reached 725 million tonnes in January-September, down 2.9 percent year on year, yet apparent crude steel consumption fell faster, by 3.8 percent, to 625 million tonnes. Average steel inventories held by key enterprises stood at 16.85 million tonnes over the period, the highest level in four years and 8.7 percent above the same period of 2025, weighing persistently on prices. The China Steel Price Index averaged 92.28 points, a ten-year low for the period, even as the CRU international index rose 12.2 percent, underscoring a widening divergence between Chinese and global steel prices.
CISA identified the surge in fuel costs as the main driver of the earnings decline. In September, the average purchase prices of coking coal, metallurgical coke and injection coal were 1,916, 2,128 and 1,381 yuan per tonne, up 51.2, 38.3 and 49.6 percent year on year respectively. Profits have declined month by month since June, hitting their lowest level since 2025 in September, and most member mills expect weak demand and high coal costs to persist into the fourth quarter. CISA said it will issue self-discipline reminders to around ten mills that have not strictly followed its production and sales discipline principles.
Alongside the near-term pressure, the briefing highlighted an accelerating structural transformation. Steel use by the manufacturing sector accounted for 51 percent of total demand in 2025, surpassing construction for the first time, and rose further to 52 percent in the first half of 2026. Medium plate output expanded by 4.91 million tonnes in the first nine months while rebar output fell by 17.18 million tonnes. CISA also reported that 95.1 percent of key mills have embedded digital transformation in corporate strategy and 82.9 percent have built intelligent centralized control centers, while hydrogen metallurgy and near-zero-carbon production lines continue to advance.
