Crude steel reduction and quality improvement
According to the latest data released by the National Bureau of Statistics on December 15, my country’s crude steel output in November 2025 was 69.87 million tons, a year-on-year decrease of 10.9%; the cumulative output from January to November was 891.67 million tons, a year-on-year decrease of 4.0%. Behind this seemingly contracting output data lies a profound transformation in the steel industry—steel exports in November reached 9.98 million tons, a year-on-year increase of 7.6%, profits in high-end special steel increased significantly, and hydrogen metallurgy technology has been successfully implemented. The crude steel industry is bidding farewell to the “scale competition,” improving quality while reducing output, and breaking through bottlenecks through transformation.
The continued decline in crude steel output this year stems from both the hard constraints of the capacity replacement policy and the proactive abandonment of the “price-for-volume” involution model by enterprises.
A series of policies aimed at combating involution is reshaping the industry ecosystem. Addressing the long-standing issues of idle capacity and cutthroat price competition in the crude steel industry, a series of policies implemented at the end of the year have broken through these barriers from four dimensions: strict control over new capacity additions, rigorous investigation of low-price competition in the market, guidance for high-end transformation in the industry, and precise financial support for high-quality enterprises. The effects are gradually becoming apparent. Key steel companies have begun to refuse unprofitable orders, and some companies have seen profit increases despite declining revenue. Special steel companies have even seen a 13-fold year-on-year increase in profits, a stark contrast to the low-price struggles of ordinary steel companies. From January to October, the total profit of the ferrous metal smelting industry reached 105.3 billion yuan, a significant increase compared to the same period last year, confirming the value of the transformation.
Diverging demand structures guide the upgrading direction of the crude steel industry. From January to October, the output of construction steel declined by 1.2% year-on-year, while the output of steel used in manufacturing, such as cold-rolled thin plates and electrical steel sheets and strips, increased by 9.9% and 7.3%, respectively. Demand is strong in high-end sectors such as automobiles and shipbuilding. Zhangxuan Technology’s green automotive steel sheets have been supplied to BMW and Mercedes-Benz, and its ultra-low temperature resistant steel for nuclear fusion is used in the world’s first EAST device. This differentiation is driving the transformation of crude steel products towards “high-precision” and “cutting-edge” products. A number of products, such as high-quality 45# round steel and bearing steel, have obtained carbon footprint certification, acquiring a “green ID card” for global trade.
The transformation of the crude steel industry is essentially a shift from “scale dividends” to “value dividends.” The November production data is both a result of policy adjustments and a microcosm of the industry’s changing development logic. With the popularization of hydrogen metallurgy technology, the release of special steel production capacity, and the diversification of export channels, the crude steel industry will completely escape the quagmire of low-price competition. In the future, supported by ultra-long-term special treasury bonds and driven by global demand for green steel, crude steel production may continue to adjust, but the development direction of high added value and low emissions is becoming increasingly clear. The steel industry is writing a new chapter of high-quality development with a focus on reducing quantity and improving quality.