From "Scale" to "Quality": The Shift and Restructuring of Traditional Construction Steel Demand

Steel in Construction Review: Traditional Steel Demand Under Pressure, Crude Steel Demand Pattern Accelerates Restructuring

As the main drivers of traditional steel demand, the contraction in real estate and infrastructure sectors has become the core variable driving the evolution of the industry landscape. In terms of total volume, national crude steel demand decreased from 1.05 billion mt in 2020 to 910 million mt in 2025. Real estate steel demand dropped from 411 million mt to 261 million mt, a decrease of 36.5%; infrastructure steel demand fell from 219 million mt to 179 million mt, a decline of 18.3%. The dual pressures of deep adjustments in the real estate sector and marginal convergence in infrastructure investment are significantly suppressing upstream steel demand. Structurally, the share of steel used in real estate declined from 39% in 2020 to 29% in 2025, while the share for infrastructure decreased from 21% to 20%, indicating a synchronous contraction. The traditional growth model driven by real estate and infrastructure is weakening. Meanwhile, the proportion of steel used in diverse fields such as automobiles, machinery, and home appliances increased from 40% to 51%, gradually becoming the new support for crude steel demand. The downstream demand structure of the steel industry is undergoing a profound transformation from being driven by traditional real estate and infrastructure to being propelled by multiple industries.

Steel in Construction Forecast: Transition Period for Traditional Steel Demand in "Better Housing" and "Quality Infrastructure"

During 2026-2030, with the gradual decline of China's demographic dividend, the era of rapid growth in the real estate sector will come to an end, and the industry's development logic will shift from scale expansion to quality improvement. The high-quality development goals for the 15th Five-Year Plan period have been clearly defined, with the core direction of the industry shifting from meeting the basic need of "having a place to live" to fulfilling the quality requirement of "living well." Improving housing quality and enhancing property service quality will be the focus, leading to a slower pace of development and optimization of business structures. As a result, the traditional incremental boost to steel demand from real estate will continue to weaken. At the same time, the 15th Five-Year Plan period is also a critical window for the transformation of China's infrastructure investment, moving away from the traditional reliance on large-scale investments and strong stimulus paths centered around railways, highways, airports, and water conservancy projects, towards a new phase focused on structural optimization. This new phase emphasizes building a modern infrastructure system that is efficient, technology-driven, green, low-carbon, open, shared, and interconnected, prioritizing quality over quantity. Under this development orientation, it is difficult for infrastructure to generate significant additional steel demand. According to SMM estimates, the downward trend in steel demand from traditional construction sectors will continue from 2025 to 2030, but the momentum of decline will gradually weaken, and the rate of decline will narrow. By 2030, real estate steel demand is expected to reach 210 million mt, a 19.4% decrease from 2025; during the same period, the infrastructure sector, under structural optimization and strategic project support, will show signs of marginal stabilization, with steel demand expected to reach 188 million mt in 2030, an increase of 4.9% from 2025.