Energy saving and carbon reduction policies promote the development of electric furnace steel. The production enthusiasm of the graphite electrode industry has been enhanced, providing support for green steel.

【Steel Prices】Fall to "2" Thousand, Losses Exceed 30 Billion, Steel Prices Drop Below Expectations in March

Massive Collapse! Futures Rebar Falls Below 3200! Will Steel Prices Drop Another 200?

With the arrival of the "Golden March and Silver April" period, steel prices have entered a consecutive downward trend. In just over two weeks, the main rebar futures contract dropped by 150 yuan. Industry insiders believe that this drastic price drop is mainly due to two reasons: first, the weakening support from raw material prices for steel; second, the pessimistic outlook for steel exports due to overseas tariff policies.

Previously cautious steel traders, who had been wary of overpricing, now feel as if cold water has been poured over their heads. They are starting to panic. From the beginning of 2024, the price dropped from 4100 yuan/ton to below 3000 yuan/ton by February 2025, with some regions even seeing rebar prices as low as 2800 yuan/ton. Steel mills are generally losing more than 500 yuan per ton of steel, and traders are stuck with depreciating inventory while downstream customers are sitting back, saying, "Let it drop! It can still go lower!" The market feels like a frozen lake—quiet on the surface, but with dangerous undercurrents beneath.

According to statistics from 24 listed steel companies' 2024 earnings forecasts, 15 are expected to post losses. Among these, 11 are seeing losses widen, 2 have switched from profit to loss, and 2 have seen a narrowing of losses. In contrast, 9 companies are expected to be profitable, but 7 of them have declining profits, and only 2 have seen growth. The total expected losses amount to over 30 billion yuan.

Steel Price Decline: A New Path to Cost Reduction and Efficiency

"Will steel prices repeat the tragedy of 2015?" and "Will prices fall back to '2' thousand?" Since the beginning of the year, steel prices have shown weak performance, with a rapid drop after a brief price hike before the New Year. What will the remaining part of March bring? Will it repeat the disastrous start of the first quarter last year?

Some industry analysts believe that steel prices might bottom out and rise slightly in March. The supply-demand balance in China is still being optimized, and overall, it is in a relatively tight state. Additionally, the downstream construction projects are gradually ramping up in the "spring awakening," and as steel prices stabilize, market demand is expected to improve in mid-to-late March. However, there is no momentum for a strong rebound, and attention should remain on factors such as molten iron production, stock reduction in mills and warehouses, and tariff policies.

A report from Zhongzheng Pengyuan states that in 2025, the black metal industry chain will face an oversupply of raw materials, demand diversification, and complex policy regulation. It is expected that overall prices in the black metal sector will show a "decline then rise" trend. In the first half of the year, profits will shift from the raw material side to the finished product side. In the second half, there may be opportunities to bottom out in the raw materials market, and prices will rise again, while steel mills will face squeezed profits. The expected price range is: rebar 2800-3600 yuan/ton, iron ore 650-900 yuan/ton, and coking coal 900-1600 yuan/ton.

Industry insiders also expect that the domestic steel market will experience a "decline then rise" trend in the second quarter. With warmer weather, downstream demand is expected to gradually recover, but short-term market pressures from inventory reduction may lead to continued slight price drops. In the later part of the second quarter, as demand further releases, steel prices are expected to stabilize and rise.

In recent years, the worsening imbalance between supply and demand in the steel industry has led to continued price declines, which has been a major factor in the industry's shrinking profitability. As a result, cost reduction, efficiency improvement, and transformation have become the general strategy for steel enterprises. The "photovoltaic + steel" model, which makes use of idle factory roof space to develop distributed photovoltaic projects, directly converts solar energy into electricity. This process generates no noise pollution and does not harm air or water resources, offering advantages of low cost and easy modification.

Therefore, many steel companies have adopted this model as an effective means of green transformation and cost reduction. Leading steel enterprises such as Tianxi Steel Group, Zhongtian Steel Group, Maanshan Steel, Longteng Special Steel, and Baosteel Group have all developed photovoltaic power generation projects, which not only offer significant carbon reduction benefits but also generate considerable revenue for the companies.

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