Intensified Supply-Demand Game and Policy Support: China's Section Steel Market Enters a New Phase of Volatile Adjustment

Supply Side: High Production Levels and Persistent Cost Support

Data from the National Bureau of Statistics indicate that the output of large section steel and medium-small section steel remained at high levels in September. Although some steel mills have undertaken voluntary maintenance or slight production cuts due to narrowed profit margins, overall supply remains ample. In terms of key raw materials, billet prices have recently held firm, and iron ore prices, despite some corrections, remain elevated, providing strong cost support for section steel prices. consecutive price increases for coke have further squeezed mill profits, making them more cautious in pricing and strengthening their willingness to hold prices firm. This situation characterized by "high costs, high supply, and low profits" is one of the main features of the current market.

Demand Side: Real Estate Drags, Infrastructure Provides Buffer

Demand-side performance presents a "mixed picture." The traditional major steel consumer—the real estate sector—continues to be weak, with key indicators like new construction starts and floor space under construction showing year-on-year declines, severely constraining the release of demand for construction-related section steel such as H-beams and I-beams. This contrasts sharply with the bustling construction scenes typical of past "Golden September and Silver October" periods.

However, there are bright spots amidst the gloom. To counter economic downward pressure, national and local governments continue to ramp up infrastructure construction. Multiple major transportation projects, water conservancy facilities, and urban renewal projects have entered accelerated construction phases, effectively driving demand for relevant section steel products. Particularly in the new energy sector, demand for steel used in photovoltaic mounting systems and wind turbine towers maintains rapid growth, becoming a new and strong demand driver for the section steel market. This structural shift indicates a gradual transition in the focus of section steel consumption.

Policy and Outlook: Short-Term Volatility, Long-Term Potential

On the macro level, recent policies introduced by the central government, including the "package of measures for debt resolution" and several optimized regulatory policies for the real estate market, aim to stabilize market expectations and prevent systemic risks. Although it will take time for the effects of these policies to translate into tangible steel demand, they undoubtedly send a positive signal to the market.

In the short term, the section steel market is expected to maintain a volatile adjustment pattern. The contradiction between high supply and structurally insufficient demand remains the core constraint. Price increases face pressure from demand validation, while decreases are supported by high costs. Market participants need to closely monitor steel mill production schedules, the progress of downstream project commencements, and fluctuations in raw material prices.

In the long run, as the economy steadily recovers and policy effects gradually materialize, the demand structure of the section steel market will continue to optimize. The proportion of demand from traditional construction may further decline, while the application share in high-end manufacturing, green energy, and infrastructure sectors is set to keep rising. China's section steel industry is moving towards a new development stage oriented by quality and segmented market demand.