China’s steel industry is in turmoil as Angang Steel Co. Ltd., a subsidiary of the country’s second-largest steelmaker, reported a staggering loss of 7.1 billion yuan ($981 million) for 2024. This marks more than double the 3.3 billion yuan loss it faced in the previous year. The loss underscores a worsening crisis driven by weak demand, falling prices, and high input costs.
The industry, once fuelled by China’s construction boom, is now grappling with structural slowdowns and rising debt. Steelmakers in China were largely unprofitable in 2024, and early data from 2025 suggest continued struggles.
Falling Demand, Rising Costs, and Global Tariffs Hit the Sector
Angang Steel pointed to collapsing steel prices and weak demand in key sectors as primary reasons for its steep losses. While steel prices plunged, the cost of iron ore and other essential raw materials remained stubbornly high, squeezing margins.
Despite the crisis, Chinese steel production remained above one billion tonnes in 2024, a level analysts call unsustainable given the current market conditions. Excess supply and sluggish domestic demand have intensified financial pressure on producers.
Global protectionism is adding to the sector’s troubles. Countries like the United States, India, and Vietnam have imposed tariffs on Chinese steel imports, limiting export opportunities. With demand slowing at home and trade barriers rising abroad, steelmakers are finding it increasingly difficult to stay profitable.
Will Government Intervention Offer Relief?
Industry experts see some hope for recovery in 2025 if domestic steel prices rebound. Bloomberg Intelligence analyst Michelle Leung suggests that Angang’s losses may narrow if the market stabilizes.
The Chinese government is also expected to step in. Beijing has signaled plans to enforce production cuts to curb overcapacity and support prices. If these measures take effect, they could provide some relief to struggling steelmakers. However, with construction activity slowing and global trade pressures mounting, a swift turnaround remains uncertain.
For now, China’s steel sector remains in a precarious position, facing economic headwinds that show no signs of easing.