Data from China's National Bureau of Statistics (NBS) shows steel consumption fell about 17 percent from nearly 1 billion tons in 2021 to 830 million tons in 2025. This is largely due to the crisis in the real estate market. While increased demand for steel from manufacturing and exports has not been able to fully offset the impact of the real estate downturn, most estimates indicate that consumption in 2026 will remain largely constrained or may decline only slightly.
This is due to stronger momentum in manufacturing demand and very little improvement in the construction sector compared to 2025.
In China, exponential growth in infrastructure development and construction since the beginning of economic growth. century, coinciding with rapid urbanization. Rising production and exports have also boosted the Chinese economy, and all of these factors have created huge demand for steel, with production increasing by a staggering 700 percent to more than 1 billion tons in 2024 from less than 130 million tons in 2000.
However, after decades of rapid infrastructure development, China's cycle of urbanization and infrastructural growth appears to have run its course. The previous model was based on investments in basic industries. Now, with investment declining and consumption growing at a relatively slow pace, it is becoming increasingly difficult to achieve targeted GDP growth.
Structural decline in the real estate sector
The real estate sector, once the largest consumer of steel in the downstream sector, has entered a period of deep adjustment. The data shows that the combined share of buildings and infrastructure construction has declined from 55 percent of total steel consumption in 2010 to 41 percent in 2023.
Since the beginning of the 14th Five-Year Plan period (2021-2025), the share of steel consumed by the real estate sector relative to total steel consumption has dropped significantly from about 32 percent in 2021 to about 23 percent. in 2025. Driven by market adjustments, the average annual consumption of steel in the real estate sector during the 14th Five-Year Plan period fell by about 13 percent compared with the 13th Five-Year Plan period.
China's official statistics for January-June 2026 show that investment in real estate development fell by 18 percent year on year. During the same period, sales by area fell 10.8 percent year over year. New construction starts have decreased by approximately
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