China’s Steel Industry Strives for Quality-Oriented Transformation in 2026, the First Year of the 15th Five-Year Plan

“2026 is the first year of the 15th Five-Year Plan and a crucial year for China’s steel industry to further advance ‘capacity reduction, optimization, quality improvement and transformation’,” said Xia Nong, Vice President of the China Iron and Steel Industry Association (CISA), at the recently held 2026 (17th) High-Quality Development Conference of the Steel Industry, according to People’s Daily Online.

Facing multiple challenges from profound changes in new demands, new driving forces and new models, as well as changes in the domestic and international economic situation, Xia emphasized that the steel industry should strengthen confidence, tackle difficulties, and implement three key transformation projects: “quality improvement and product innovation”, “energy conservation, carbon reduction and efficiency enhancement”, and “digital and intelligent transformation”.

Supply-demand imbalance remains the primary contradiction affecting the quality and efficiency of the steel industry. Data shows that in 2025, China’s crude steel output reached 961 million tons, a year-on-year decrease of 4.4%, while the apparent consumption of crude steel stood at 829 million tons, a year-on-year drop of 7.1%—2.7 percentage points higher than the output decline. Amid oversupply, some enterprises blindly pursued scale benefits and competed for market share through price wars, intensifying “involutionary” competition in the industry, reported Xinhua News Agency.

To promote high-quality development, Xia proposed adhering to capacity governance and self-disciplined production control to prevent vicious “involutionary” competition. On the basis of strictly implementing the crude steel output control policy, efforts will be made to establish a new capacity governance mechanism, prohibit new capacity, and open up channels for capacity withdrawal by eliminating outdated, high-pollution and low-efficiency equipment.

Wen Gang, Director of the Steel Division of the Raw Materials Industry Department under the Ministry of Industry and Information Technology (MIIT), noted that the 15th Five-Year Plan Outline has comprehensively deployed the optimization and upgrading of traditional industries, requiring structural adjustment of key industries such as steel to resolve structural contradictions and accelerate the upgrade to the mid-to-high end. “We must coordinate efforts on both supply and demand sides to achieve a high-level dynamic balance,” he said.

Expanding the application space of steel materials is regarded as an important means to address supply-demand imbalance, with the promotion of steel structure buildings as a key area. CISA has proposed deepening cooperation with downstream sectors such as shipping, transportation, agricultural machinery and heavy equipment to explore new markets and uses for steel products this year.

Hebei, a major steel-producing province, has made remarkable progress in supply-side structural reform in recent years, reducing the number of steel smelting enterprises from 123 to 39, with all operating steel enterprises reaching Class A environmental performance. In 2025, the added value of Hebei’s steel industry increased by 9.6% year-on-year, and the profit per ton of steel reached 149.96 yuan, 31.4% higher than the national average, according to People’s Daily Online.

Song Xiangdang, relevant person in charge of the Hebei Provincial Department of Industry and Information Technology, stated that Hebei’s steel industry is focusing on five development goals and promoting the transformation of steel products from raw material grade to material grade. With 31 steel enterprises having a R&D investment intensity exceeding 3%, Hebei has achieved technological breakthroughs, such as HBIS Group’s launch of 2400MPa ultra-high strength and toughness hot-formed steel for automobiles in collaboration with Chery Automobile.