- CISA attributes mills’ higher margins in CY’25 to production discipline
- Association calls for production cuts as profits slide again in Sep, Oct’25
Mysteel Global: Self-disciplined production control and inventory reduction are essential measures to address the current challenges facing China’s steel industry, Jiang Wei, Vice Chairman and Secretary General of the China Iron and Steel Association (CISA), told delegates at Mysteel’s annual conference in Shanghai last weekend.
Jiang noted that in 2025, despite a sharp decline in domestic steel demand and persistently low steel prices, Chinese steelmakers’ profitability margins improved, largely due to stronger self-discipline across the industry.
During the first 10 months of this year, China’s apparent crude steel consumption totalled 710 million tonnes, down 6.4% y-o-y. October alone saw a steep y-o-y decline of 12.3%, widening by 5.6 percentage points compared with September, he said.
In January-October, CISA member mills reported total gross profits of RMB 104.2 billion ($14.8 billion), surging 153% from the same period last year, according to Jiang.
However, profits at Chinese steel mills declined rapidly in September and October, as the anticipated seasonal recovery in steel demand failed to materialise, leading to a growing imbalance between supply and demand. Rising steelmaking raw material costs, combined with falling steel price,s further squeezed mills’ margins.
Gross profits of CISA member mills fell by 34.6% m-o-m in September and dropped by a further 20.4% in October to RMB 7.1 billion, Jiang noted.
He stressed that regulating production and managing inventories are critical for the steel sector to safeguard margins under current market conditions. Higher output, he warned, tends to lead to rising inventories, which in turn depresses steel prices and erodes profitability.
Given the currently elevated steel inventories, continued weakness in the property sector, and slowing infrastructure investment, Jiang pointed out that risk prevention should take precedence over profit-seeking during this year’s winter steel stockpiling season.
When it comes to the supply side, China’s crude steel output accounts for more than half of the world’s total. “It is neither realistic, feasible, nor sustainable to address oversupply in China’s steel industry through exports,” Jiang said, noting that Chinese steel exports have faced a rising number of anti-dumping and countervailing investigations this year.
Looking ahead, Jiang warned that China’s steel industry could face even more severe challenges during the 15th Five-Year Plan period (2026-2030). While self-discipline can help alleviate short-term pressures, the fundamental solution to steel overcapacity lies in phasing out outdated capacity, the CISA official said.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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