##The total volume has fallen, but the medium and thick plates have turned red against the trend

The signal of "winter" in the steel industry is becoming increasingly evident in production data. According to data from the National Bureau of Statistics, from January to August 2026, the black metal smelting and rolling processing industry achieved a revenue of 49288.6 billion yuan, a year-on-year decrease of 1.1%; The cumulative total profit was only 29.43 billion yuan, a significant decrease of 62.4% year-on-year. It can be said that the profit plate of the entire industry is being compressed to a low level in nearly a decade.

However, according to the monitoring of key statistical enterprises by the China Iron and Steel Industry Association, the internal trend of plate and strip materials is clearly differentiated. In August, the production of medium and thick plate rolling mills was 6.91 million tons, a year-on-year increase of 1.3%. The cumulative production from January to August was 53.04 million tons, a year-on-year increase of 3.7%; The monthly production of hot and cold rolling mills decreased by 0.9% and 6.4% respectively, and the cumulative production of hot rolling mills continued to decline by 1.3% year-on-year. That is to say, in the context of overall capacity contraction, medium and thick plates have become one of the few varieties to maintain growth.

By variety, the production of container plates, pipeline steel plates, and shipbuilding plates showed the highest year-on-year growth rate, while wind power steel plates, boiler container plates, and bridge steel plates saw a significant decline. This pattern of mutual growth and decline reflects a profound change in the downstream demand structure of sheet metal - high-end demand related to exports, ships, and energy equipment remains strong, while varieties related to real estate and traditional infrastructure continue to shrink.

##2、 Price fluctuates at a low level, and the gross profit of the board is completely inverted

Behind the increase in quantity is the weakness in price. As of October 16, 2026, the national price of rebar is 3230 yuan/ton, hot-rolled coil is 3250 yuan/ton, cold-rolled coil is 3650 yuan/ton, and medium thick plate is 3410 yuan/ton. Although the year-on-year decline is limited, most varieties have fallen into the loss zone.

According to calculations, the immediate gross profit of thread, hot coil, medium thick plate, and cold coil on that day was -71 yuan/ton, -122 yuan/ton, -218 yuan/ton, and -318 yuan/ton, respectively; If calculated based on a 30 day lag caliber, the gross profit of cold coil has dropped significantly to -403 yuan/ton. The profit margin of 247 steel mills nationwide is only 8.23%, less than 10%. In other words, the sheet metal processing industry is now losing one ton at a time, with medium thick plates and cold coils being the hardest hit areas.

The trend of costs is also not optimistic. The price of first-class coke in Rizhao Port has dropped to 2020 yuan/ton, and the profit of the coking plant is -613 yuan/ton; The Platts 62% iron ore index was reported at $89.75 per ton, with a total port iron ore inventory of 165.347 million tons, an increase of 25.1 million tons year-on-year. The "two end squeezing" between the raw material end and the finished product end has continuously weakened the willingness of steel mills to increase production, and some steel mills have started maintenance.

##3、 Shift in demand structure: Steel used in manufacturing industry surpasses construction industry for the first time

The relay baton on the demand side is shifting from the construction industry to the manufacturing industry. According to sources from the Steel Association, the proportion of steel used in China's manufacturing industry surpassed that of the construction industry for the first time last year, and this trend has further strengthened in the first half of this year. Excavator production increased by 20.3% year-on-year in August, becoming a bright spot supporting the demand for sheet metal; In contrast, air conditioning production decreased by 11.1% year-on-year, and automobile production decreased by 2% year-on-year, indicating that the recovery in the durable consumer goods sector is still uneven.

Inventory clearance provides another reprint certificate. As of the latest week, the total inventory of the five major steel varieties was 14.7983 million tons, a decrease of 686100 tons or 4.43% compared to the previous week. Among them, the apparent consumption of hot coil, medium thick plate, and cold coil was higher than the production, and they were in the channel of destocking. This has to some extent eased the selling pressure on the spot market and is also the basis for prices to stabilize and stop falling at a low level.

##4、 Stable reduction in export volume, synchronized pressure on barriers

The export market is undergoing a rebalancing of stable quantity and price reductions. Customs data shows that in the first half of 2026, China exported 54.87 million tons of steel, a year-on-year decrease of 5.6%, with an average export price of 701 US dollars per ton, a year-on-year increase of 0.3%; In September, the monthly export rebounded to 10.492 million tons, an increase of 3.3% compared to the previous month, with an average export price of 735.7 US dollars per ton, maintaining above 10 million tons for five consecutive months. However, the cumulative export from January to September was 85.641 million tons, still a year-on-year decrease of 2.6%. The industry generally believes that the recent recovery is more of a rhythmic replenishment brought about by overseas inventory replenishment, rather than a trend reversal, and the export center continues to decline compared to 2025 throughout the year.

The weight of policies is also increasing. Starting from January 1, 2026, steel products with 300 customs commodity numbers will be included in the export license management. Export enterprises must apply for licenses based on contracts and quality inspection certificates. This mechanism promotes the shift of exports from "increment is king" to "quality control and quantity improvement". At the same time, international trade barriers continue to escalate: the EU will implement the requirement for the declaration of origin for steel products' smelting and casting 'from October 1, 2026, coupled with the promotion of the Carbon Border Adjustment Mechanism (CBAM), resulting in a significant increase in export compliance costs. For export enterprises mainly based on sheet metal, price competitiveness alone is far from enough. "Having a clear carbon footprint and obtaining proof of production location" is becoming a passport to enter the high-end market.

##5、 Policy Reshaping Landscape: Strictness of Trade in and Implementation of Carbon Compliance

The restructuring of the supply side is also accelerating. The new regulations on capacity replacement in the steel industry, which will be introduced in 2026, will significantly increase the requirements: the ratio of capacity replacement for ironmaking and steelmaking in China shall not be less than 1.5:1, and the ratio of capacity replacement for mergers and acquisitions shall not be less than 1.25:1; At the same time, gradually eliminate capacity replacement between different enterprises and set a 2-year transition period. This means that future capacity transfer can only be completed through substantive mergers and acquisitions, and the industry is accelerating towards a new pattern of "leading enterprises and differentiated support for small and medium-sized enterprises".

Another landmark event is that 2026 will be the first year for the steel industry to be included in the national carbon emissions trading market for compliance. During the 14th Five Year Plan period, more than 80% of crude steel production capacity has completed ultra-low emission transformation, and a number of low-carbon metallurgical demonstration projects such as hydrogen based vertical furnaces and near zero carbon factories have been successively implemented. Green compliance has changed from an "optional" to a "survival necessity". For sheet metal enterprises, the dual standards of energy efficiency and carbon efficiency will widen the gap in both cost and order aspects.

##6、 Breaking through the high-end trend: seeking profits from "quality"

In an era where the overall dividend is diminishing, high-end has become the main breakthrough line for sheet metal enterprises. Recently, Angang Steel Cold Rolling Plant has successfully overcome the technical bottleneck of 6.0mm thick 50 # high-strength carbon steel and achieved stable mass production, solving the industry problem of weld cracking and strip breakage that is prone to occur due to the high strength and hardness of this steel type, further enhancing the competitiveness of high-end cold-rolled products. This case is quite representative - when the gross profit of ordinary coils turns negative, high-end products with the ability to "do what others don't have" can still maintain the bottom line of prices and orders.

Overall, in 2026, the Chinese steel plate industry is at a critical juncture of "deep adjustment and structural differentiation": overall volume contraction, weakened profits, and export pressure are the underlying factors, while the growth of medium and thick plate production against the trend, the relay of manufacturing demand, and the breakthrough of high-end and low-carbon products are the highlights. It can be foreseen that in the next two years, with the deepening of mergers and acquisitions and low-carbon transformation, the sheet metal industry will shift from "scale" to "quality, efficiency, and green". Enterprises lacking core competitiveness will gradually clear out in the reshuffle, while those capable of grasping structure and trends will be the first to cross the cycle.