The recession in the construction sector continues to put pressure on demand
Yuan said China's apparent steel demand declined by 7.8 percent in 2025, mainly due to the ongoing downturn in the construction sector. While rebar demand remained under pressure, declining by about five percent last year, demand for flat rolled products showed greater resilience, with hot rolled roll (HRC) consumption showing modest growth of about one percent. He noted that this discrepancy reflects the ongoing shift in China's economic structure, where manufacturing continues to outpace the real estate sector.
He stressed that the slowdown in the real estate market remains a key factor affecting demand for steel, pointing to a reduction in the number of new construction projects and a decrease in investment levels. Investments in infrastructure, traditionally the main support for steel consumption, also turned negative for the first time, as funds were increasingly directed towards debt restructuring and land purchase by local governments. According to Mr. Yuan, this indicates that China's infrastructure development has matured to a large extent, while government policy is now increasingly focusing on growth based on high technology and manufacturing rather than investment expansion.
Production supports demand for flat rolled products against the background of structural shifts
Despite the weakness in construction, China's manufacturing sector continues to perform better than expected, supporting demand for flat rolled products. Mr. Yuan noted that HRC production grew by 7.6 percent in 2025, which was one of the fastest growth rates in the last decade, as steel companies shifted production from long-rolled products to flat-rolled products. However, he added that this shift is unlikely to fully offset the decline in construction-related demand.
Looking ahead, he stated that domestic steel consumption is expected to decline slightly in 2026, with total demand forecast to decline by about 0.1 percent. Construction demand is projected to decline further by about 2.5 percent, while manufacturing demand may continue to grow, albeit with increasing uncertainty. He added that, although in the real estate market
