Ten Major Development Trends in the Steel Industry

The steel industry, as one of the pillars of the national economy, is undergoing significant changes and opportunities. This article outlines ten key development trends currently shaping the industry.

01 Strong Export Performance

In August 2024, China’s steel exports reached 9.495 million tons, a year-on-year increase of 14.7%. From January to August, exports totaled 70.575 million tons, up 20.6%. These figures indicate robust international demand for steel products and an increase in the export competitiveness of domestic steel companies.

02 Intensified Overseas Plant Construction

With globalization deepening, Chinese steel companies are increasingly investing in overseas plants. For instance, on September 9, China Steel Equipment signed a contract for a 2 million-ton hot-rolled coil project in Egypt. Additionally, the total investment for the first overseas factory in Zambia has reached about $60 million. Projects like these not only expand market reach but also promote global steel industry realignment.

03 Effective Patent Innovation

China’s steel companies have significantly boosted their innovation capabilities, with a steady increase in patent applications. The “2023 China Steel Enterprise Patent Innovation Index” shows a consistent rise in patent filings from 2018 to 2022, with Baosteel ranking first. This trend reflects the growing technical innovation capacity of the Chinese steel industry.

04 Higher Talent Educational Levels

The rapid development of the steel industry has led to a pressing demand for high-quality talent. Many graduates from top universities are entering the field, with companies like Fangda Jiu Steel hiring over 40 new graduates in July 2024. This influx of talent is injecting new energy into the industry and driving ongoing development.

05 Continuous Industry Chain Extension

To enhance competitiveness, Chinese steel companies are extending their supply chains. For example, the Rizhao Electroplating Industry Park has seen significant project development, with a projected annual output value of 13 billion yuan. These extensions are enhancing the overall value and competitiveness of the steel industry.

06 Accelerated Shift to Unmanned Factories

Intelligent transformation is key for steel companies to enhance competitiveness. The rise of “unmanned factories” is notable, with companies like Angang Mining optimizing equipment management and improving operational efficiency. Baosteel is also significantly expanding its use of AI and robotics.

07 Ongoing Capacity Reductions

China’s steel industry has implemented supply-side structural reforms, with measures to control crude steel output. Recent policies aim to reduce output while ensuring industry efficiency and sustainability.

08 Accelerated Mergers and Acquisitions

Policies encouraging cross-regional and cross-ownership mergers are gaining traction, aiming to consolidate the industry. Recent agreements, such as that between Shandong Province and China Baowu, reflect this trend, pushing for larger, more competitive steel groups.

09 Short-Process Electric Arc Furnace (EAF) Becoming Mainstream

As scrap steel availability increases and environmental standards tighten, short-process EAF is gaining prominence, with a projected increase in EAF steel production to 30% by 2035. Local initiatives are already seeing significant EAF adoption.

10 Enhanced Profitability in Special Steel Sector

Special steel, due to its high added value, has demonstrated stronger profitability. In 2023, 10 special steel companies reported a net profit of 13.187 billion yuan, while traditional steel firms faced overall declines. The focus on high-end production lines is driving growth in this sector.

These trends indicate that the steel industry is in a transformative phase, adapting to new market dynamics and technological advancements while striving for sustainable growth.