Looking back at the steel section market in 2024, the domestic supply and demand contradiction was acute, market competition was fierce, macro policies continued to be strengthened to provide support, Sino-US relations were tense, the Federal Reserve shifted from raising interest rates to cutting interest rates, and the US presidential election and other internal and external multiple factors intertwined and affected the market price of steel sections in China throughout the year, showing a volatile and significant downward trend.

Looking ahead to 2025, there will be opportunities amid crises. The situation of oversupply is unlikely to change in the short term, but there is no need to be overly pessimistic. The situation between China and the United States and the contradiction between supply and demand cannot be resolved quickly in a short period of time. In 2025, domestic policies will continue to be strengthened, the transformation and upgrading of the steel industry is underway, and the stabilization of the real estate market is expected to lead to a soft landing. All these are changing in a positive direction. It is comprehensively expected that the domestic section steel market will continue to fluctuate and decline in a narrow range in 2025.

In 2024, the price center of domestic profiles will continue to shift downward

In 2024, domestic profile prices continued to fluctuate and decline, with a cumulative drop of over 600 yuan (per ton, the same below). The prices of mainstream varieties dropped from just over 4,000 yuan at the beginning of the year to the range of 3,200 to 3,400 yuan across the board. According to the average price trend chart of No. 5 Angle steel across the country over the past three years, the average price was 4,426 yuan in 2022, 4,281 yuan in 2023, and 3,599 yuan in 2024, with declines of 145 yuan and 576 yuan respectively. The decline was significantly expanded in 2024. From the perspective of the annual average price, as of the end of December 2024, the national average price of Angle steel was 3,599 yuan per ton (the same below), a cumulative decline of 682 yuan compared with the same period last year. The average price of H-shaped steel is 3,471 yuan, a cumulative decrease of 586 yuan compared with the same period last year (for details, see Figure 1).

Ii. Analysis of Domestic Section Steel Supply Situation in 2024 Since 2018, the domestic hot-rolled section steel market has been in a stage of rapid development, with production capacity increasing year by year. The real estate industry has entered a downward channel, forcing traditional building materials steel mills to start transforming and enter the section steel field, reaching a peak in 2023. A rough estimate shows that In 2023, China's new section steel production capacity was approximately 15 million tons. These capacities will be fully put into the market in 2024. Against the backdrop of a significant increase in supply and a sharp decline in demand, the contradiction of oversupply in the domestic section steel market will become increasingly severe in 2024. Under the background of oversupply, what changes will occur in China's section steel market in 2024? Negative impacts: Section steel products are highly homogeneous, and market competition is fierce. In order to capture market share, many enterprises adopt a price-cutting strategy, resulting in an awkward situation of high costs and low profits for the entire industry. Short-process steel mills are being phased out at an accelerated pace. The number of billet adjustment and rolling steel mills, represented by Tangshan in northern China, has dropped from nearly a hundred ten years ago to less than 20 by 2024. A large number of steel traders were forced to phase out and transform, and the existing ones mainly operated with low inventory. Positive impact: On the one hand, products and services are constantly improving, promoting the extension of the section steel industry chain to the downstream, and developing towards the goal of "specialization and depth". It actively promotes the diversified development of the industry, especially the development of some high value-added products and special steel, to enhance market adaptability and profitability. On the other hand, more traders are beginning to seek diversified development paths, paying more attention to credit and service, establishing new circulation systems, and developing in depth both upstream and downstream to create one-stop procurement services. Iii. Inventory Analysis of the Domestic Section Steel Market in 2024: The number of upstream section steel mills is increasing. Why do agents generally report that the inventory is not high, having dropped by half compared to the peak period, or at least by one-third? According to the research of Lang Steel Network, although the inventory of agents has decreased, the number of agents in the areas that steel mills can reach has increased. Secondly, the proportion of direct supply from steel mills is rising year by year. Especially for some large-scale centralized procurement platforms and projects, most of them adopt the method of fixed rolling by steel mills and direct dispatching by steel mills, bypassing the intermediate links, which has also led to a reduction in the role of the intermediate reservoir. Iv. Analysis of Domestic Steel Section Demand Trends in 2024 \ n \ nIt is well known that half of China's steel section demand is used in the real estate and infrastructure sectors. In recent years, the real estate market has shifted from rapid growth to an accelerated decline. Indicators such as completed real estate investment, construction area, new construction area, and sales area have continued to fall, leading to a reduction in the demand for construction steel. The slowdown in the growth rate of infrastructure investment in 2024 reflects the fiscal tightness under the pressure of local debt. The limited space for local fiscal efforts has restricted the expansion capacity of infrastructure investment. In 2024, the total domestic demand for section steel showed a marginal weakening, which in turn intensified the contradiction between supply and demand of domestic section steel and led to an accelerated decline in prices. V. Forecast of the Domestic Section Steel Market in 2025 \ n \ nooverall, policies in 2025 will still play a positive role in China's section steel market, but it is difficult to quickly change the situation of oversupply. In 2025, China's section steel market will face a situation where supply remains unchanged, exports are under pressure, domestic demand is declining, and cost support is weakening. It is comprehensively expected that the average price of section steel in China will continue to decline in 2025. However, the decline is expected to narrow and the fluctuations will become more frequent.