During the 14th Five-Year Plan, China’s steel industry is exploring a path toward reducing output while improving quality.

During the 14th Five-Year Plan period, China’s steel industry will face challenges head-on and emerge stronger than ever. Under the 14th Five-Year Plan, China’s steel industry has entered a “period of profound adjustment.” Unlike previous adjustments that occurred amid incremental growth, the current adjustment—characterized by reductions in capacity—presents unprecedented difficulties and challenges. To meet these challenges, under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, the steel industry has earnestly implemented the decisions and deployments of the Party Central Committee and the State Council, continued to focus on the industry’s key priorities outlined in the “1231” framework, and steadily advanced the “232” key tasks. The industry remains committed to high-quality development, takes supply-side structural reform as the main line, and accelerates the shift toward “reduced-capacity development and optimized existing capacity,” driving a transformation in the development model from scale expansion to quality and efficiency enhancement. Over the past five years, through unwavering promotion of “dual control over capacity and output,” bold implementation of joint restructuring, and proactive establishment of industry self-regulatory mechanisms, China’s steel industry has not only maintained a steady course amid turbulent adjustments but has also forged a solid steel backbone for building Chinese-style modernization by breaking through bottlenecks and achieving breakthroughs.

Reduced-Volume Development: Reshaping the New Supply-Demand Balance Through “Dual Control of Production Capacity and Output”

During the 14th Five-Year Plan period, facing a “deep adjustment cycle” marked by a significant decline in demand following the peaking of steel production, the steel industry has firmly implemented the national policy of “dual control over capacity and output,” promoting a steady yet declining trend in crude steel production. In the first four years of the 14th Five-Year Plan, the average annual growth rates of crude steel and steel products nationwide were -1.1% and 1.1%, respectively—both significantly lower than the average annual growth rates of 5.4% and 4.6% observed during the 13th Five-Year Plan period. In 2024, China’s crude steel production reached 1.005 billion tons, a decrease of 5.6% from the 1.065 billion tons produced in 2020. At the same time, China’s apparent consumption of crude steel in 2024 was 893 million tons, down 13.8% from the 1.036 billion tons consumed in 2020. Over the past five years, the steel industry’s total-capacity control efforts have yielded remarkable results, effectively promoting a dynamic balance between supply and demand in the steel market. The “double-decline” trend evident in the following two sets of data clearly reflects the steel industry’s development trajectory of reduced output during the 14th Five-Year Plan period.

As Jiang Wei, Deputy Secretary of the Party Committee and Vice President and Secretary-General of the China Iron and Steel Association, pointed out at the Q3 2025 information briefing, during the 14th Five-Year Plan period, the iron and steel industry has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, taken high-quality development as its theme, and followed the principles of marketization and rule of law in regulating crude steel production. The industry has also actively explored and promoted the establishment of new mechanisms for capacity governance, achieving a shift from “de-capacity” to “dual control over capacity and output.” In the process of reducing and adjusting capacity, this approach has effectively facilitated structural optimization and upgrading, thereby enhancing the quality of industry development.

Look back

●On February 8, 2021, the Ministry of Industry and Information Technology issued a document clearly stating that the addition of new steel production capacity is strictly prohibited, and a “dual-control” policy on both capacity and output will be implemented to ensure that the nation’s crude steel output in 2021 declines year-on-year.

●On May 10, 2021, the National Development and Reform Commission and the Ministry of Industry and Information Technology launched the 2021 “look-back” inspection on steel capacity reduction efforts.

●On June 1, 2021, the newly released “Implementation Measures for Capacity Replacement in the Iron and Steel Industry” issued by the Ministry of Industry and Information Technology and the “Opinions on the Filing and Management of Iron and Steel Smelting Projects” issued by the National Development and Reform Commission officially came into effect.

●On December 29, 2021, the Ministry of Industry and Information Technology released the “14th Five-Year Plan for the Development of the Raw Materials Industry,” clearly stating that during the 14th Five-Year Plan period, the production capacity of key raw materials such as crude steel will only be reduced, not increased.

●On February 7, 2022, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Ecology and Environment jointly issued the "Guiding Opinions on Promoting High-Quality Development of the Iron and Steel Industry," which stated that existing urban steel plants should focus on in-situ transformation and upgrading. As for urban steel plants that fail to meet ultra-low emission standards and lack competitiveness, they should focus on reducing capacity and eventually exiting the market while remaining in their current locations.

●On April 19, 2022, at the National Development and Reform Commission’s press conference for April, it was reported that in 2021, the nation’s crude steel production decreased by nearly 30 million tons year-on-year, and the task of reducing crude steel output was fully accomplished. In 2022, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, and the National Bureau of Statistics will continue to carry out efforts to reduce crude steel production nationwide, guiding steel enterprises to abandon the extensive development model that prioritizes quantity over quality and promoting high-quality development of the steel industry.

●According to data released by the National Bureau of Statistics on January 17, 2023, China’s crude steel production in 2022 totaled 1.013 billion tons, a decrease of 2.1% year-on-year. Building on the 30 million-ton reduction achieved in 2021, an additional reduction of over 20 million tons was realized, successfully completing the crude steel production reduction target for two consecutive years.

●On April 3, 2024, the National Development and Reform Commission announced that in 2024, the NDRC, the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, the Ministry of Emergency Management, and the National Bureau of Statistics, together with relevant parties, will continue to carry out nationwide crude steel production control efforts. The relevant departments will also jointly conduct a comprehensive survey of basic equipment information for steel smelting enterprises across the country.

●On August 22, 2024, the General Office of the Ministry of Industry and Information Technology issued the “Notice on Suspending Steel Capacity Replacement Work.”

●On September 22, 2025, the Ministry of Industry and Information Technology and four other departments jointly issued the "Work Plan for Stabilizing Growth in the Iron and Steel Industry (2025–2026)," which clearly states that the addition of new production capacity will continue to be strictly controlled, and precise regulation of capacity and output will be implemented. Specifically, annual output targets must be set on the principle of supporting the development of advanced enterprises and compelling backward, inefficient capacities to exit the market.

●On October 24, 2025, the “Implementation Measures for Capacity Replacement in the Iron and Steel Industry (Draft for Comments)” was released.

Aggregation for Strength: Forging a New Industrial Landscape Through Joint Restructuring

During the 14th Five-Year Plan period, driven by both policy guidance and market forces, a grand wave of mergers and reorganizations swept through the steel industry, leading to a significant leap in industrial concentration. As shown in the chart above, in 2024, the crude steel output of China's top 10 steel companies accounted for 43.0% of the nation's total, an increase of 4.4 percentage points from 38.6% in 2020.

Underlying this is a reshaping of the industrial competitive landscape. During the 14th Five-Year Plan period, the steel industry has been oriented toward strengthening industrial synergy and has carried out in-depth joint restructuring—for instance, China Baowu has merged and reorganized Xinsteel and Zhongsteel, made strategic investments in Shandong Iron and Steel, and reorganized Bensteel and Linggang; CITIC Tai Fuhua Special Steel has joined hands with Nangang; Jianlong Group has restructured Xining Special Steel; and Jingye Group has successively acquired Lianyungang Xingxin Iron & Steel and Yingkou Plate. As a result, the industrial layout has been further optimized, industrial concentration has continued to rise, and the basic pattern of “South Baowu, North Ansteel” as the dominant development framework has largely taken shape.

These restructuring efforts are no longer mere physical aggregations; rather, they have triggered a powerful “chemical reaction” through deep integration across management, technology, talent, and markets. For example, the “one headquarters, multiple bases” model developed by China Baowu during its strategic restructuring has become the industry’s mainstream approach and is eagerly being emulated by peers. This model not only achieves optimal allocation of resources but also plays a crucial role in addressing regional market fluctuations and ensuring the security of the nation’s industrial supply chains. Following the restructuring of Anben, Angang has realized annual synergy benefits exceeding several billion yuan by unifying management across procurement, sales, logistics, and R&D. The complementary strengths of the two companies in areas such as automotive steel and home appliance sheets have significantly enhanced their competitiveness and influence in the Northeast region and nationwide markets. The collaboration between CITIC Tai Fuhua Special Steel and Nangang represents a brilliant example of specialized integration, giving rise to the world’s largest specialized special steel group. This partnership has enabled the group to achieve absolute leadership in high-end niche markets—including bearing steel and steel for automotive components—and has forged a distinctive competitive edge characterized by “high-end efficiency, specialization, uniqueness, and innovation.”

Look back

●On January 19, 2021, CITIC Tai Fook Special Steel Group successfully acquired a 20.4% stake in Tianjin Pipe Manufacturing Co., Ltd. and assumed full responsibility for its production, operations, and management.

●On January 28, 2021, six key steel enterprises from the Shaanxi-Shanxi-Sichuan-Gansu Forum—Shaanxi Iron and Steel Group, Shanxi Jianlong, Jinan Iron and Steel, Jincheng Iron and Steel, Gaoyi Iron and Steel, and Jianbang Group—registered and established Northwest United Iron and Steel Co., Ltd.

●On February 1, 2021, Yunnan Province signed a cooperation agreement with China Baowu to promote the joint restructuring of China Baowu and Kunsteel.

●On August 20, 2021, the restructuring conference of Ansteel and Bensteel was held. On October 15, Ansteel Group Bensteel Group Co., Ltd. was officially unveiled, marking the start of substantive integration.

●On December 24, 2021, Liugang Shares issued the “Announcement on the Progress of the Major Asset Restructuring of Liuzhou Iron and Steel Co., Ltd.,” announcing that it would increase its capital contribution to Guangxi Iron and Steel Group Co., Ltd. in the form of monetary funds. Following the completion of the capital increase, Liugang Shares became the controlling shareholder of Guangxi Iron and Steel.

●On November 9, 2022, the State-owned Assets Supervision and Administration Commission of the State Council approved the joint restructuring of China Baowu and Xinjiang Steel Group, under which 51% of Xinjiang Steel’s shares were transferred to China Baowu free of charge.

●On December 23, 2022, the launch meeting for the restructuring of China Baowu and China Steel Group was held. With approval from the State Council, China Steel Group has been wholly incorporated into China Baowu and will no longer be directly supervised by the State-owned Assets Supervision and Administration Commission (SASAC).

●On March 30, 2023, the signing ceremony for the equity transfer agreement between Ansteel Group and the Chaoyang Municipal Government of Liaoning Province was held at Ansteel. Under the agreement, the Chaoyang Municipal Government transferred its 49% stake in Linggang Group to Ansteel Group. On October 10, 2024, Linggang Shares and Ansteel Group signed a “Free Transfer Agreement,” making Ansteel Group the controlling shareholder of Linggang Group. On December 29, Ansteel Group’s Lingyuan Iron & Steel Group Co., Ltd. was officially inaugurated.

●On April 2, 2023, CITIC Limited announced that, at the invitation of Nangang Group, its indirectly wholly-owned subsidiary, Xinye Steel, would make a strategic capital injection into Nangang Group. On December 15, the newly established XinNangang Group was officially unveiled and became a member of the CITIC Group’s ecosystem. As a result, CITIC Group has become the actual controller of the listed company, Nangang Shares.

●On November 6, 2023, Jianlong Group’s restructuring investment in the Xining Special Steel group of companies was officially approved in accordance with the law, marking the first listed steel company that Jianlong has acquired through merger and acquisition.

●On December 28, 2023, the Shandong Provincial Government signed an agreement with China Baowu, under which China Baowu will make a strategic investment in Shansteel Group and acquire a 49% stake in the company. Baosteel Shares will hold a 48.6139% stake in Shansteel Rizhao Company.

● On September 29, 2024, Jingye Group and Rizhao Steel Yingkou Plate Co., Ltd. completed a strategic merger.

Rebuilding Order: Breaking the “Rush” Through Self-Discipline to Build a New Development Ecosystem

At the beginning of the 14th Five-Year Plan, as steel production peaked and demand sharply declined, the supply-demand contradiction intensified, marking the steel industry's entry into a "period of profound adjustment." The data mentioned above show that after reaching a recent high in 2021, the steel industry’s profits plummeted from 2022 to 2024, declining year by year. In the first nine months of 2025, however, profitability showed some improvement, with the total profits of key statistical steel enterprises reaching 96 billion yuan, and the average sales profit margin rebounding to 2.10%. Of course, under conditions of severe supply-demand imbalance, the steel industry has been able to maintain modest profitability only thanks to the implementation of the “dual control policy on capacity and output” and the vigorous promotion of self-discipline within the industry.

Since the 14th Five-Year Plan, the China Iron and Steel Association has taken the lead in issuing an industry self-regulatory initiative, putting forward the “Three Determinations and Three No’s” principle (determine production based on sales—don’t turn cash into inventory; determine production based on efficiency—don’t allow operational “blood loss”; determine sales based on cash flow—don’t turn cash into accounts receivable). Faced with the severe situation of deepening losses in the steel industry, the Association has organized a series of self-regulatory activities, including the “Chunxiao Action,” to implement the central government’s directives aimed at preventing vicious “involutionary” competition. These efforts have guided enterprises to exercise self-discipline by controlling production and reducing inventories, thereby jointly maintaining the stable operation of the steel market. Major steel companies have actively responded to the self-regulatory initiative, adhering firmly to the “Three Determinations and Three No’s” principle and shifting from their previous habitual mindset of “defending market share and grabbing market share” toward rational management focused on “stabilizing prices and ensuring profitability.” For example, China Baowu has proactively reduced its long-process capacity lacking competitiveness, concentrating resources on high-tech, high-value-added specialty steel products. It has creatively proposed the operating principle of “production based on orders, output determined by marginal costs, and revenue driven by profits.” The Shaanxi-Shanxi-Sichuan-Gansu Forum, through the vivid practice among steel companies of “breaking involution, reducing production, cutting pollution, and enhancing efficiency,” has become a model for promoting high-quality regional market operations and fostering industry-wide self-regulation and collaboration.

This extensive and in-depth industry self-regulatory practice marks a shift for Chinese steel enterprises—from mere competitors to a “community of shared destiny” that, at a higher level, safeguards the health of the industry ecosystem. It is not only an effective strategy for coping with downward market pressures but also a significant milestone on the industry’s path toward maturity and high-quality development.

Look back

●On May 26, 2021, the China Iron and Steel Association held a meeting on self-regulation in the steel industry and released the “Initiative on Building a Stable and Orderly Market Order to Promote High-Quality Development of the Steel Industry” on the same day.

●On August 11, 2022, He Wenbo, Secretary of the Party Committee and Executive Chairman of the China Iron and Steel Association, officially proposed the “Three Constants and Three No’s” principle at the launch event for the new book “China Rebar” and the founding conference of the Rebar Industry Alliance.

●From March 20 to May 20, 2024, the China Iron and Steel Association launched the “Chunxiao Initiative,” which aimed to promote industry self-discipline, control production, and reduce inventory, playing a positive role in stabilizing the industry’s operations.

●On March 28, 2024, the China Iron and Steel Association issued an initiative titled “Recognize the Situation, Maintain Steadfastness, and Jointly Safeguard the Stable and Orderly Development of the Iron and Steel Industry.” On April 2 of the same year, the China Metallurgical News published an editorial entitled “Self-Discipline, Production Control, and Inventory Reduction—A ‘Good Remedy’ for Addressing the Current Market Situation,” followed by a series of related reports that helped create a favorable public opinion environment for ensuring the industry’s stable operation.

●The meeting of the Political Bureau of the CPC Central Committee held on July 30, 2024, called for strengthening industry self-discipline to prevent vicious competition characterized by “involution.” Faced with the grim situation of deepening losses in the steel industry, He Wenbo, Secretary of the Party Committee and Executive Chairman of the China Iron and Steel Association, personally made arrangements and issued directives to launch a thematic publicity campaign aimed at reinforcing industry self-discipline and curbing “involution-style” malicious competition. Jiang Wei, Deputy Secretary of the Party Committee, Vice Chairman, and Secretary-General of the China Iron and Steel Association, published a signed article titled “Upholding Self-Discipline, Controlling Production, and Reducing Inventories to Prevent ‘Involution-Style’ Malicious Competition” in the China Metallurgical News.

Meanwhile, the China Metallurgical News promptly launched a special column titled “Breaking the ‘Involution’ and Jointly Building a New Industry Ecosystem,” publishing an editorial entitled “Breaking ‘Involution’: A Test That Must Be Won.” It also introduced a series of reports titled “Breaking Involution—Lessons from Overseas,” thereby creating a favorable public opinion environment for the industry to strengthen self-discipline and put an end to “involution.”

●On August 30, 2024, the China Iron and Steel Association held a symposium in Beijing on strengthening industry self-discipline in the steel sector. The association called on steel enterprises to implement, through concrete actions, the Party Central Committee’s call to prevent “involutionary” vicious competition and earnestly put into practice the “Three Determinations and Three No’s” business principles—stabilizing the market, improving efficiency, and reducing risks.

Conclusion

Looking back at the 14th Five-Year Plan, China’s steel industry has advanced decarbonization and capacity reduction with unprecedented determination, driven forward with far-sighted vision through joint restructuring, strengthened industry self-discipline with the wisdom of win-win cooperation, and explored the establishment of new mechanisms for capacity governance... The five-year practice has demonstrated that China’s steel industry not only has the capability to build world-class steel plants and equipment but also possesses the capacity to construct a modern, market-oriented industrial governance system.

Of course, we are also keenly aware that, having entered a new stage characterized by “reduced-volume development and optimized existing capacity,” the steel industry still has a long way to go in exploring and establishing new mechanisms for capacity governance. At the 19th China Steel Industry Chain Market Summit held on November 25, 2023, He Wenbo, Secretary of the Party Committee and Executive Chairman of the China Iron and Steel Association, pointed out the direction: “The new mechanism for capacity governance we’re talking about is one that will gradually evolve to incorporate both environmental, energy-efficiency, and carbon-emission policy constraints as well as industry self-regulation and government oversight—thus creating a new mechanism that is aligned with market laws, conducive to guiding industrial transformation and upgrading, and promoting survival of the fittest, while ensuring a balanced supply-demand adjustment that is both secure and flexible.”

We believe that during the 15th Five-Year Plan period, the iron and steel industry will embrace future challenges and opportunities with greater confidence and stability, continuously promoting high-quality development and building a world-class, high-end manufacturing sector characterized by an optimized structure, higher efficiency, stronger competitiveness, and global leadership. It will continue to contribute an irreplaceable “steel power” to the building of a strong nation and the rejuvenation of the Chinese nation.