As 2025 draws to a close, China's steel industry is facing a dual challenge of weak supply and demand, compounded by environmental production restrictions, the off-season for demand, and policy adjustments. More than 32 cities across the country have activated emergency responses to heavy air pollution, significantly constraining steel production. Blast furnace operating rates and average daily pig iron output remain low. Market demand has also entered its traditional off-season, with sluggish consumption of construction steel and traders adopting a cautious approach to winter stockpiling. Overall transactions are primarily driven by immediate needs. Industry profit margins have been severely squeezed, with most steel mills incurring losses. Looking ahead to 2026, policy will continue to emphasize balancing supply and demand and optimizing the structure. Production controls and environmental constraints will persist, and the industry will gradually transform towards high-quality development amidst growing pains.

From the forecast of 800 million tons of steel demand to the implementation of comprehensive differentiated management, 2026 will be a crucial year for the Chinese steel industry to deepen its adjustment, transformation, and upgrading. Against the backdrop of declining total output, changes in demand structure, capacity optimization and restructuring, green and intelligent transformation, and ecosystem collaboration will become unavoidable challenges for enterprises. Only those companies that accurately grasp market demand, solidly promote product optimization, quickly respond to low-carbon changes, and proactively integrate into the industrial chain collaboration will be able to win in the fierce market competition. As Xiao Bangguo stated, the steel industry has entered a stage of "reduction and optimization." Only by relying on technological innovation, lean management, and ecosystem co-construction can these challenges be transformed into an inexhaustible driving force for high-quality development, forging a more resilient and competitive steel backbone in the new era.

Last week, the steel industry faced a complex situation where significantly improved macroeconomic expectations coexisted with actual industry adjustments. The central government's strong domestic demand stimulus policies provided a valuable "expectation floor" for the market, but the implementation of new export policies, weak actual demand, and high cost pressures all required the industry to remain vigilant. Looking ahead, steel price trends will depend on the efficiency of the transmission of macroeconomic policies to real demand, the degree of pain from export structure adjustments, and the rebalancing process between costs and profits. In the short term, the market is expected to fluctuate between strong expectations and weak reality. Industry enterprises need to closely monitor the details of policy implementation and the actual pace of downstream demand recovery, and flexibly adjust their business strategies.

Global manufacturing continues to contract, with the US ISM Manufacturing PMI remaining below the 50-point threshold for nine consecutive months. German industry is facing structural difficulties, exacerbating macroeconomic pressures. Domestic policies focus on building a modern industrial system and preventing risks, aiming to stabilize domestic demand. The steel industry itself presents a complex situation of high operating rates, high losses, and low inventory. Under the influence of environmental protection-related production restrictions and proactive maintenance, supply contraction has led to a 2.5% decrease in the total inventory of the five major steel products, but apparent consumption has weakened simultaneously, with demand entering a seasonal off-season. The raw material market is volatile, and finished steel prices lack direction.

Steel futures and spot prices rose simultaneously today, with coking coal and coke futures leading the gains. Spot construction material prices remained stable with a slight upward trend, as 25 steel mills collectively raised their ex-factory prices. This round of price increases was mainly driven by steel mill maintenance, shortages of certain specifications, and tight coking coal supply, with macroeconomic expectations also providing support. Given that the increase in spot prices has narrowed, prices are expected to remain stable tomorrow.

The total output value of the special steel industry in Xisai District reached 27.7 billion yuan in the first 10 months, an increase of 1.89%. The local government is promoting the special steel industry towards high-end development and clustering through the coordinated development of leading enterprises and supporting industries.