According to the Zhitong Finance APP, China Galaxy Securities has released a research report stating that recently, steel companies have successively distributed their performance forecasts for the first half of 2025. Leading steel companies have seen significant increases in net profit attributable to shareholders, while some steel companies have reduced their losses year-on-year. The overall profitability of the steel industry is recovering. Against the backdrop of ongoing supply-side anti-involution, the production capacity of the steel industry continues to concentrate on high-quality leading companies. The firm believes that the industry is expected to continue benefiting from the release of demand for infrastructure projects and accelerated capacity regulation against anti-involution, with a focus on leading companies in specific segments and performance improvements.
<h2>The main points of China Galaxy Securities are as follows:</h2>
Significant recovery in industry profits in the first half of the year, effectiveness of steel companies' &#34;anti-involution&#34; becoming apparent
In the first half of 2025, from a performance perspective, the China Iron and Steel Association's key statistics show that the cumulative operating revenue of steel enterprises was 299.85 billion yuan, a year-on-year decrease of 5.79%; total profit was 59.2 billion yuan, a year-on-year increase of 63.26%; and the average profit margin was 1.97%, an increase of 0.83 percentage points year-on-year. According to data from the National Bureau of Statistics, in terms of output, the national crude steel production in the first half of the year was 515 million tons, a year-on-year decrease of 3.0%, which aligns with national industrial regulation policies and requirements. In terms of inventory, according to monitoring by the China Iron and Steel Association, the average month-end steel inventory of key statistical steel enterprises in the first half of the year was 18.91 million tons, the lowest level in nearly four years. In the first half of 2025, the profit of China's ferrous metal smelting and rolling processing industry was 46.28 billion yuan, a year-on-year increase of 13.7 times, the highest growth rate among all 31 major industrial categories. Steel companies are actively resisting &#34;involutionary&#34; vicious competition, working together to stabilize the market, improve quality, and increase efficiency. Self-discipline in controlling production and stabilizing operations, as well as controlling costs, are the core reasons for the improvement in industry profits. Supply-side production restrictions and capacity control help improve the supply-demand relationship in the steel industry, providing support for profit recovery.
Mid-term performance forecasts for 2025 are being released, with leading companies maintaining prominent profitability stability advantages
With the transformation and upgrading of traditional industries and the continuous advancement of anti-involution policies, the steel industry is encountering structural development opportunities amid an overall reduction in output. Recently, steel companies have successively released their mid-term performance forecasts for 2025. In terms of profitability, leading steel companies have seen significant increases in net profit attributable to shareholders: in the first half of 2025, Shougang Co., Ltd. predicts a net profit attributable to shareholders of 642 million to 672 million yuan, an increase of 62.62% to 70.22% compared to the same period last year; Jinling Mining predicts a net profit attributable to shareholders of 133 million to 169 million yuan, an increase of 66.48% to 111.54% compared to the same period last year; Fangda S.Steel expects to achieve a net profit attributable to shareholders of 380 million to 430 million yuan, an increase of 133.33% to 164.03% year-on-year; Anyang Iron and Steel expects to turn losses into profits, achieving a net profit of approximately 38.1 million yuan attributable to shareholders of listed companies. Some steel companies have reduced their losses year-on-year, with profits gradually recovering: Chongqing Iron and Steel expects to achieve a net profit attributable to shareholders of -140 million to -120 million yuan, reducing losses by 549 million to 569 million yuan compared to the same period last year; Benxi Steel Plate expects to achieve a net profit attributable to shareholders of -1.4051382 billion yuan, reducing losses by 94 million yuan compared to the same period last year.
Supply-side anti-involution policies are continuously intensified, expected to improve the industry supply-demand structure
On July 18th, the Ministry of Industry and Information Technology stated at a press conference held by the State Council Information Office that it will implement a new round of work plans to stabilize growth in ten key industries, including steel, petrochemicals, and building materials, promoting structural adjustments, optimizing supply, and eliminating backward production capacity in key industries. The China Iron and Steel Association pointed out that the main contradiction in the industry remains the imbalance between supply and demand, and steel companies should strengthen self-discipline, &#34;counter involution,&#34; and promote improvements in the supply-demand pattern of the industry. As the demand for steel in the construction industry continues to decline, the trend of localized sales of rebar is evident. Rebar remains an important circulating material in the steel market and a benchmark for steel prices, and self-discipline in the rebar market should be deeply carried out in a provincial model; efforts should be made to promote self-discipline in key varieties such as automotive plates, ship plates, and seamless steel pipes to maintain stable operation in the market for these varieties; and the principle of &#34;three determinations and three non-allowances&#34; should continue to be adhered to, with self-discipline to control production and stabilize prices.
Risk Warning
Risks of supply-side contraction being less than expected; risks of policy uncertainty domestically and internationally; risks of downstream real estate and infrastructure demand being less than expected; risks of uncertainty in the prices of raw materials such as iron ore and coal; risks of technological innovation in steel smelting, etc

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China Galaxy Securities released a research report indicating that the profitability of the steel industry has significantly recovered under the influence of supply-side policies. In the first half of 2025, the overall profit of steel companies is expected to increase by 63.26% year-on-year, benefiting from the release of demand from infrastructure projects and capacity regulation. Focus on leading companies in specific segments and their performance improvement. In the first half of the year, the national crude steel output decreased by 3.0%, and inventory is at its lowest level in nearly four years. The industry's self-discipline in controlling production and maintaining stable operations is the core reason for the improvement in profits

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JINLING MINING

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China Galaxy Securities: Supply-side policies show effectiveness, steel companies' mid-term profit recovery