China's apparent domestic steel consumption has continued to fall this year, while exports, though increasing in volume, have declined in both average price and total value, said an official with the China Iron and Steel Association (CISA) at a recent conference held on December 25.

Domestic steel demand is expected to continue declining during the 15th "Five-Year Plan" period (2026-2030), though at a slower pace than during the current 14th FYP period, predicted Wu Yong, deputy director of the Market Research Department at the CISA, during the Coal Market Outlook 2026 & Sxcoal Annual Conference hosted by Fenwei Digital Information Technology Co., Ltd. in Nanning, Guangxi.

Falling steel prices, coupled with a sharper decline in raw material costs like iron ore and coking coal, briefly boosted industry profitability.

Yet the reprieve proved short-lived. Since September, a sharp rebound in raw material prices has exerted renewed pressure on steelmakers' margins, pushing the core steel business back into collective losses by November, Wu said.

Demand-side weakness has compounded the challenge. Between January and November 2025, crude steel output fell by 4% or 37.15 million tonnes year on year, official data showed. Apparent crude steel consumption dropped 6.5% or 53.47 million tonnes on the year.

China exported 107.72 million tonnes of steel products over the first 11 months, up 6.7% year on year, but export revenues did not keep pace due to falling prices.

Indirect steel exports increased by 10.97 million tonnes from January to October compared to the same period last year, CISA monitoring data showed. Of the ten major product categories tracked by the association, eight saw growth in indirect steel exports, with the exceptions of ships and containers.

Wu emphasized that the steel industry is facing heightened operational stress due to rising costs, swelling inventories, and eroding profitability.

Looking ahead into the 15th FYP period, he argued that the steel industry is transitioning from a phase of "incremental development" to one of "reductive optimization". The core tension, he said, lies in a mismatch between China's still-robust production capacity and weakening demand fundamentals.

He forecasted domestic steel demand to extend decline at a slower pace than in the 14th FYP period. Export growth, meanwhile, faces mounting uncertainty amid trade remedy investigations, the U.S.-China trade war, and increasingly stringent export regulations.

Against the backdrop of demand reductions, achieving a dynamic equilibrium between supply and demand will be critical to maintaining steel industry stability. The sector's long-term goal of high-quality development is underpinned by economic viability, ecological responsibility, and security (incl. technological and resource), Wu stated.