Securities Daily Quotes Chen Leiming on Market Hot Topics

According to data from iFinW, as of August 26, 2025, 22 listed companies in the steel industry have released their 2025 semi-annual reports. Among these, the net profits attributable to shareholders of the parent company of 12 listed firms have all registered a year-on-year growth of over 100%. Notably, 11 out of these 12 companies reported a year-on-year decline in operating revenue.

For example, the semi-annual report of Tianjin Youfa Steel Pipe Group Co., Ltd. indicates that the company achieved an operating revenue of RMB 24.888 billion in the first half of the year, representing a year-on-year decrease of 5.81%; its net profit attributable to shareholders of the listed company stood at RMB 287 million, a year-on-year increase of 160.36%.

Regarding the primary reasons for the revenue decline yet profit improvement among some listed steel companies in H1 2025, Chen Leiming, Executive President and Secretary-General of CAMT, told Securities Daily that the phenomenon is driven by multiple factors: “A significant reduction in raw material costs has expanded profit margins; industry self-discipline in production control and price stabilization has played a role; and product structure optimization and high-end transformation have contributed. For instance, in H1 2025, the proportion of high-value-added products (e.g., automotive steel sheets, electrical steel, offshore engineering steel, and nuclear power steel) in the steel industry further increased. The overall share of high-end products in the industry reached 35%–40%, a year-on-year growth of approximately 3%–5% compared to H1 2024. Notably, segments such as new energy vehicle (NEV) steel and electrical steel witnessed substantial growth— the market size of NEV steel rose by 15%–20% year-on-year, accounting for over 40% of total automotive steel demand.”

Wang Guoqing, Director of the Lange Steel Research Center, noted to Securities Daily that in H1 2025, the overall economic operation remained stable with a positive trajectory. The decline in raw material prices drove down production costs, while the “rush export” effect further sustained profit improvements in the steel industry. For the full year, the steel supply-demand relationship is expected to experience a phased rebound, leaving room for further profit growth in the industry.

Zhao Zeze, a steel industry analyst at Shandong SCI Information Technology Co., Ltd., stated to Securities Daily that prices of raw materials such as iron ore and coking coal dropped significantly in H1 2025. As of June 30, the 62% Fe Australian fines index was quoted at $93.55 per dry metric ton, a 7.28% decrease from the start of the year. Over the same period, the coke price index fell by 31.46%, and low-sulfur prime coking coal declined by 19.70%. Additionally, self-disciplined production practices by enterprises alleviated supply-demand pressures to some extent, providing moderate support for steel prices. Some firms optimized their product mix to achieve low-inventory operational efficiency, thereby expanding profit margins.

In the long term, enhanced industrial concentration and the promotion of high-quality development are inevitable trends for the steel industry. Steel enterprises with advantages in product structure and cost control will be favored, and the competitive edge and profitability of leading enterprises will become more prominent.

Chen Leiming analyzed that the steel market will exhibit a “turnaround” in the second half of the year. While the peak price is projected to be lower than that in the same period last year, the industry as a whole is expected to embark on a recovery trajectory. For the full year, the industry’s ability to truly emerge from its predicament will largely depend on the effectiveness of production control measures and the strength and sustainability of domestic demand recovery, particularly in the manufacturing sector.

Specifically for enterprises, Chen Leiming argued that firms leading in cost reduction and efficiency enhancement, structural optimization, product upgrading, green development, and digital-intelligent transformation are likely to secure a more advantageous position in the optimized industry landscape and achieve superior profit performance.