In the first half of 2025, prices of raw materials such as iron ore and coking coal declined, leading to continued recovery in steel industry operating performance. Multiple steel enterprises emerged from profitability lows, achieving restorative growth.
Recently, Shanghai and Shenzhen A-share steel production companies disclosed their 2025 semi-annual reports, with 22 companies achieving growth in return on net assets.
**Net Profit Growth Nearly Triples**
The 33 Shanghai and Shenzhen A-share steel production enterprises achieved total operating revenue of 882.698 billion yuan in the first half of 2025, down 9.4% year-on-year, while net profit reached 10.547 billion yuan, up 281.7% year-on-year. Among these, 22 companies achieved growth in return on net assets.
Baoshan Iron & Steel Co.,Ltd. recorded operating revenue of 151.4 billion yuan and net profit of 4.879 billion yuan in the first half, ranking first among the 33 companies in both metrics. The company stated it actively addressed market downside risks, adhered to its general operating policy of "maintaining planning leadership, innovation-driven development, reform-stimulated vitality, and collaborative value creation," and deeply promoted integrated production-sales-research transformation. The company leveraged its multi-base advantages, strengthened working capital management, and significantly improved cash flow conditions. The asset-liability ratio stood at 39.87% at the end of June, maintaining a stable range to support steady operations amid market volatility.
Zhejiang Jiuli Hi-tech Metals Co., Ltd. achieved operating revenue of 6.105 billion yuan, up 26.39% year-on-year, ranking first among the 33 companies in revenue growth, with net profit of 828 million yuan, up 28.48%. The company built an operating model centered on centralized procurement, specialized production, and unified sales, forming a production and operation system with effective production-sales integration, intensive efficiency, and balanced stability.
Liuzhou Iron & Steel Co.,Ltd. posted net profit growth of 579.54% year-on-year in the first half, ranking first among the 33 companies, with net profit reaching 368 million yuan and operating revenue of 34.67 billion yuan, down 8.325% year-on-year. The company focused on operational accounting, flexibly adjusted strategies to reduce procurement costs, strengthened technical research to optimize cost-effectiveness, and strictly controlled costs and expenses. The company's overall labor productivity increased by 35.98% year-on-year, molten iron costs decreased by 21%, and inventory amounts of iron ore, coking coal, and pulverized coal injection decreased by 53% year-on-year.
Benxi Steel Plates Co., Ltd. recorded a loss of 1.399 billion yuan in the first half of 2025, the largest loss among the 33 steel companies, with operating revenue of 24.7 billion yuan, down 12.93% year-on-year. The company cited rapidly changing raw material markets, with coking coal and coke prices significantly affected by safety, environmental, and geopolitical factors, creating substantial pressure on cost control.
Pangang Group Vanadium Titanium & Resources Co., Ltd. saw both operating revenue and net profit decline during the reporting period, with revenue falling 40.57% to 4.254 billion yuan and net profit declining 245.15% year-on-year, resulting in a loss of 199 million yuan, representing the largest decline among the 33 listed companies.
**Continued Pressure on Demand Side**
Since the beginning of this year, the global economic situation remains severe and complex, with escalating international trade barriers, weak domestic steel demand, and limited price rebound space. The steel industry exhibits operational characteristics of supply contraction, weak demand, declining costs, and price bottoming.
China's steel industry faces multiple challenges, with the sector in a deep adjustment period transitioning from incremental expansion to stock optimization, leading to intensified supply-demand contradictions. While China implements stable growth policies, investment growth has slowed, and policy implementation requires time to translate into actual downstream demand recovery.
The domestic steel industry continues to exhibit a "three highs and three lows" pattern of high production, high costs, high inventory, low demand, low prices, and low efficiency, with the market overall in a bottoming phase.
In the first half, China's crude steel production reached 515 million tons, down 3.0% year-on-year, while global crude steel production totaled 934 million tons, down 2.2%.
On the demand side, market differentiation is evident, with the real estate market remaining sluggish and construction steel demand weak. Although the automotive industry saw production and sales growth of 12.5% and 11.4% respectively from January to June under policy stimulus, signs of consumption overdraft in the second half suggest domestic sales growth may slow.
The shipbuilding sector performed strongly, with China's completed shipbuilding volume, new orders, and order backlog accounting for 46.6%, 63.7%, and 57.2% of the global total respectively in terms of CGT from January to June, providing certain support for plate and other steel varieties.
**Supply-Demand Pattern Expected to Improve**
According to the latest research by Wood Mackenzie, China, which currently accounts for 49% of global steel demand, is expected to see annual consumption decline by 5-7 million tons per year over the next decade. This profound transformation, while creating overcapacity challenges, is creating historic opportunities for India and Southeast Asia to emerge as new engines of global steel growth.
On July 18, the Ministry of Industry and Information Technology announced at a State Council Information Office press conference that it would implement a new round of stable growth work plans for ten key industries including steel, petrochemicals, and building materials, promoting structural adjustment, supply optimization, and elimination of backward capacity.
The China Iron and Steel Association noted that the main contradiction facing the industry remains supply-demand imbalance, and steel companies should strengthen self-discipline and combat "involution" to promote improvement in the industry's supply-demand pattern.
Industry experts predict that in the second half of the year, with continued and timely strengthening of efforts around expanding investment and domestic demand, active fiscal policy, and moderately loose monetary policy, the macroeconomic upward trend is expected to remain unchanged. Against the backdrop of advancing industry capacity governance and addressing disorderly competition, backward and inefficient capacity will gradually exit, and domestic industrial chain order is expected to improve.
Demand-wise, automotive, home appliances, energy, and shipbuilding sectors maintain steady demand, while high-quality urban renewal is expected to restore infrastructure steel demand. However, overseas business expansion and exports face pressure due to escalating trade protectionism and Southeast Asian anti-dumping measures.
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