As of late August, with the final steel company disclosing its half-year report, the 2026 interim results for A-share steel enterprises are fully unveiled. Among the 26 sampled companies covering ordinary steel, special steel, stainless steel, and pipes, 11 reported negative net profits attributable to shareholders, and 7 earned less than 300 million yuan—meaning fewer than half were profitable.
However, a closer look at the first half of 2026 reveals that companies in the special steel, ferrosilicon, and lithium battery materials sectors delivered standout "counter-cyclical" performances. Meanwhile, Wind data shows that in the last week of August, the CSI All-Share Steel Industry Index (932113) slipped another 1.2%, bringing its year-to-date decline to roughly 6.8%.
In this context, several information agencies have released their outlooks for the second half of the year. Although their perspectives differ, nearly all predict a market that is "weak and fluctuating, with narrowing declines."
Clear Divergence in Half-Year Performance
According to Wind statistics, the 26 A-share steel companies generated combined operating revenue of approximately 555.7 billion yuan in the first half of 2026, with total net profits attributable to shareholders nearing 7 billion yuan. The performance gap among these firms is stark: 7 companies posted profits below 300 million yuan, while 11 suffered losses.
Most of the underperformers were ordinary steel producers. Specifically, Angang Steel Co., Ltd. recorded a net loss of 2.047 billion yuan, Benxil Steel Plate Co., Ltd. lost 1.908 billion yuan, Anyang Iron & Steel Co., Ltd. posted a loss of 1.181 billion yuan, Lingyuan Iron & Steel Co., Ltd. lost 808 million yuan, and Xinyu Iron & Steel Co., Ltd. recorded a loss of 607 million yuan. Combined, these five companies lost approximately 6.55 billion yuan.
Lange Steel Information Network attributes this predicament to a "slower pace of transformation"—an over-reliance on construction steel, a customer base concentrated in real estate and infrastructure, and delayed product structure upgrades. These three factors have made it especially difficult for these established players to weather the current cycle.
According to Zhuochuang Information, the national average price of rebar in the first half of the year was about 3,200 yuan per ton, up a mere 0.1% year-on-year. Meanwhile, the average pre-tax production cost of rebar rose 1.28% to 2,872 yuan per ton, coke prices surged 23.80%, and iron ore prices fell 7.11% year-on-year due to lower ocean freight rates. This has left ordinary steel producers with only razor-thin margins on sales.
On the supply and demand front, data from the National Bureau of Statistics shows that from January to May this year, national crude steel output was approximately 416 million tons, down 3.9% year-on-year, while steel product output reached about 593 million tons, down 1.5%. Lange estimates that apparent domestic crude steel consumption in the first five months was 365.168 million tons, down 4.0% year-on-year, with the decline narrowing by 3.1 percentage points compared to the previous full year.
In sharp contrast to the ordinary steel companies, several firms in the "special steel + new materials" segment delivered "counter-cyclical" results during the period. Yongxing Special Materials Technology Co., Ltd. staged a "lithium carbonate comeback," achieving net profits attributable to shareholders of 959 million yuan with an overall gross margin of 28.10%, ranking second among the 26 companies. Inner Mongolia Erdos Resources Co., Ltd. leveraged ferrosilicon to become a "cash cow," generating 1.416 billion yuan in net profits with a 24.0% gross margin, topping the list. Citics Special Steel Group Co., Ltd. showcased special steel stability with 2.99 billion yuan in profits, while Baoshan Iron & Steel Co., Ltd. demonstrated the "fortitude of a super giant" with 4.571 billion yuan. Nanjing Iron & Steel Co., Ltd. offered another "contrarian example" with 1.322 billion yuan in profits, Zhejiang Jiuli Hi-Tech Metals Co., Ltd. recorded 393 million yuan with a 21.2% gross margin, and Changbao Co., Ltd. earned 134 million yuan.
At the 2026 Shanxi Industry Chain Summit Forum, Wang Yingguang of the Lange Steel Research Center highlighted the structural shift in the steel industry: in 2026, construction steel's share of total steel output has dropped to 39%, with hot metal continuously shifting toward higher-value-added flat products. At the China Coal-Coke-Steel Industry Conference held on August 20, Wu Yong, deputy director of the China Iron and Steel Association's Market Research Department, also noted that while construction remained a major drag in the first half, demand from shipbuilding and power equipment in the manufacturing sector grew rapidly. This explains why higher-value-added steel companies have been able to "power through" the industry's winter.
Institutional Outlook for the Second Half
With such a pronounced divergence in first-half performance, what characteristics will the steel market exhibit in the second half of the year, and how will they impact A-share steel companies? These questions are drawing significant market attention.
Institutional forecasts show broad consensus with subtle variations. Wang Guoqing of the Lange Steel Research Center believes that in the second half, weak global economic recovery, rising trade protectionism, and the implementation of the EU's Carbon Border Adjustment Mechanism (CBAM) will continue to suppress external demand. Domestically, the pattern is one of "strong exports, resilient consumption, and weak investment," with steel demand maintaining a split of "strong manufacturing, stable infrastructure, and weak real estate." On the supply side, output reduction controls and energy-saving and carbon-reduction policies are being steadily implemented. On the raw materials front, ample iron ore supply is pushing prices down, while coal-coke and low-carbon transformation costs provide rigid bottom-line support. Overall, the steel market is expected to show "weak fluctuations with narrowing declines," with no deep sell-offs, and the price center in the second half is projected to rise by 50 to 100 yuan per ton compared to the first half.
Mysteel, on the other hand, predicts that steel prices will "fluctuate within a range," with the average price of Shanghai rebar expected to fall slightly by 1.5% and hot-rolled coil by 0.5% on a sequential basis.
Notably, export structures are undergoing a "two-stage" adjustment. From January to May, direct steel exports totaled 44.56 million tons, down 8% year-on-year, while indirect exports reached 68.09 million tons, up 8.65%, driven mainly by machinery and automobiles. The steel industry's "going global" is shifting from "selling steel" to "exporting equipment"—a sign that traditional export logic is being reshaped.
Zhuochuang Information emphasizes that in the second half, geopolitical risks may ease marginally, allowing the market to return to fundamentals. With real estate bottoming out without improvement, supply continuing to contract, ample ore supply, and weakening coke support, there is a risk of a downward shift in the cost center. Under a scenario of "weak demand recovery, supply contraction, and lower costs," steel prices are likely to fluctuate weakly.
On the policy front, some analysts note that the Ministry of Industry and Information Technology's new "Measures for Capacity Replacement in the Steel Industry" issued in May raised the replacement ratio uniformly to 1.5:1. Coupled with 2026 being the first compliance year for the steel industry's inclusion in the national carbon emissions trading market, long-process enterprises face escalating carbon costs and compliance barriers—accelerating the dismantling of the old "volume-over-value" path dependency.
Returning to the capital markets, as of August 30, the CSI All-Share Steel Industry Index has fallen approximately 6.8% year-to-date, with more than half of its constituent stocks trading below a price-to-book ratio of 1. Market analysts suggest that for companies with "average" profitability, valuations have already priced in extreme pessimism. For those trapped in losses, surviving the "winter" of the second half of 2026 and into 2027 is the most pressing challenge. Meanwhile, for high-value-added benchmarks, there is potential to detect the first signs of a structural recovery amid "weak fluctuations with narrowing declines"—beyond the cycle, steel companies that do not rely on real estate are quietly cultivating "a new path to growth."
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