Operation of the Steel Industry in 2024

2024 is a crucial year for the deep adjustment of the steel industry, with a series of new situations, changes, and challenges constantly emerging. The downward pressure on the traditional steel industry is increasing, and the prices of raw materials and fuels are prone to rise but difficult to fall. The operation of the steel industry continues to present a "three high, three low" situation of hi

Operation of the Steel Industry in 2024
2024 is a crucial year for the deep adjustment of the steel industry, with a series of new situations, changes, and challenges constantly emerging. The downward pressure on the traditional steel industry is increasing, and the prices of raw materials and fuels are prone to rise but difficult to fall. The operation of the steel industry continues to present a "three high, three low" situation of high output, high cost, high export, low demand, low price, and low efficiency, and the characteristics of entering the stage of "reduced development and stock optimization" are becoming increasingly evident.
Steel production has decreased year-on-year, and domestic consumption continues to decline. According to data released by the National Bureau of Statistics, in 2024, the cumulative production of crude steel in China reached 1.005 billion tons, a year-on-year decrease of 1.7%, achieving the expected target of a decrease in production; Producing 852 million tons of pig iron, a year-on-year decrease of 2.3%; Producing 1.4 billion tons of steel, a year-on-year increase of 1.1%; Equivalent to an apparent consumption of 892 million tons of crude steel, a year-on-year decrease of 5.4%. Overall, the decline in steel consumption is significantly greater than the decline in production, and the trend of strong supply and weak demand in the market has not changed. By variety, the proportion of steel used in the construction industry has further decreased to 50%, while the proportion of steel used in the manufacturing industry has increased from 42% in 2020 to 50% in 2024. The structural adjustment of steel products is still ongoing.

The export quantity of steel has increased, while the export amount has decreased. According to data released by the General Administration of Customs, in 2024, China's cumulative export of steel reached 111 million tons, a year-on-year increase of 22.7%; The average export price was 755 US dollars per ton, a year-on-year decrease of 19.3%; The cumulative export amount was 83.6 billion US dollars, a year-on-year decrease of 1.1%. Accumulated imported steel of 6.82 million tons, a year-on-year decrease of 10.9%; The average import price is 1689 US dollars per ton, an increase of 1.8% year-on-year; The cumulative import amount was 11.5 billion US dollars, a year-on-year decrease of 9.2%. Equivalent to a net export of crude steel of about 113 million tons, a year-on-year increase of 31.5%, reaching the highest level in history.
Steel prices have decreased year-on-year, while iron ore prices are running at a high level. In 2024, the average value of China's Steel Price Index (CSPI) was 102.47 points, a year-on-year decrease of 8.39%. Among them, the average value of the long timber index was 105.22 points, a year-on-year decrease of 8.83%; The average value of the board index is 100.58 points, a year-on-year decrease of 10.09%. During the same period, the average CRU International Steel Price Index was 197.5 points, a year-on-year decrease of 10.21%, which was greater than the decrease in domestic steel prices. From the perspective of raw materials and fuels, China imported 1.237 billion tons of iron ore, a year-on-year increase of 4.9%, and the import volume reached a historic high; The average import price was $106.93 per ton, a year-on-year decrease of 7.08%, which was 1.31 percentage points smaller than the decrease in steel prices. Key statistics show that the procurement cost of imported iron ore powder for enterprises decreased by 5.58% year-on-year, while the procurement costs of domestic iron concentrate (dry basis), coking coal, metallurgical coke, and scrap steel decreased by 0.76%, 8.14%, 11.28%, and 8.68% respectively year-on-year.
The economic benefits have declined year-on-year, and the overall financial risk is controllable. In 2024, according to preliminary statistics, key statistical enterprises achieved a revenue of 6.02 trillion yuan, a year-on-year decrease of 6.4%; Operating costs amounted to 5.71 trillion yuan, a year-on-year decrease of 5.9%, which is 0.5 percentage points lower than the decrease in revenue; The total profit was 42.9 billion yuan, a year-on-year decrease of 50.3%; The average sales profit margin was 0.71%, a year-on-year decrease of 0.63 percentage points. At the end of December, the asset liability ratio of key enterprises was 62.72%, an increase of 0.56 percentage points year-on-year and a decrease of 0.07 percentage points from the end of June; Inventory occupied capital of 614.4 billion yuan, a year-on-year decrease of 5.8%; Accounts receivable amounted to 158.8 billion yuan, a year-on-year decrease of 0.2%. From the perspective of asset liability ratio and the occupation of "two funds", the overall risk of industry funds is controllable.

Environmental indicators continue to improve, and environmental performance is further enhanced. Steel companies are accelerating the implementation of ultra-low emission transformation and extreme energy efficiency projects, and environmental indicators continue to improve. In 2024, the comprehensive energy consumption per ton of steel for key statistical enterprises was 549.68 kilograms of standard coal per ton, a year-on-year decrease of 0.61%; The comparable energy consumption per ton of steel is 480.96 kilograms of standard coal per ton, a year-on-year decrease of 1.75%; The water intake per ton of steel is 2.33 cubic meters, a year-on-year decrease of 0.81%; The drainage volume decreased by 10.39% year-on-year, and the emissions of chemical oxygen demand, ammonia nitrogen, volatile phenols, total cyanide, suspended solids, and petroleum pollutants in wastewater decreased by 16.91%, 19.52%, 5.49%, 10.25%, 7.64%, and 33.12% respectively year-on-year; The emissions of sulfur dioxide, particulate matter, and nitrogen oxides in exhaust gas decreased by 12.23%, 9.84%, and 10.22% year-on-year, respectively.
From the perspective of industry operation data, in 2024, the situation of strong supply and weak demand in the steel market is very obvious, and the production and operation of enterprises will be very difficult. Practice has proven that in the context of overall downward demand, companies that rush to produce when the market slightly improves are prone to repeating the same mistakes of increasing losses and losses; And enterprises that make rational judgments and proactive adjustments have exercised their abilities, enhanced their resilience, and nurtured new opportunities through calm response. A large number of member steel enterprises, such as Baowu, Shagang, CITIC Taifu Special Steel, Hunan Iron and Steel, Nangang, Fangda Special Steel, etc., resolutely practice the "three determinations and three don'ts" business principle, strive to improve their efficiency, actively explore new production and operation models in the stock optimization stage, and open up new development tracks in the future. They work hard, uphold integrity and innovation, and play a role as ballast and star for the steel industry to achieve stable operation, resolve risks and hidden dangers, and accumulate development advantages.