[SMM Analysis]Steel Consumption Nears 300 Mt! How Will Manufacturing Support Steel Demand in 2026-2030

I. Manufacturing Review: Transition of Crude Steel Demand from "Construction-Dominated" to "Manufacturing-Driven"
National crude steel demand decreased from 1.05 billion mt in 2020 to 910 million mt in 2025, with the steel consumption in manufacturing (machinery, automobiles, home appliances, and ships) increasing from 242 million mt to 280 million mt, a rise of 15.7%, and its share rising from 23% to 31%, becoming a key force in boosting the upgrade of crude steel demand structure. In contrast, construction demand fell from 631 million mt to 440 million mt, with its share dropping from 60% to 49%.

Within the manufacturing sector, the machinery industry contributed the most to the increase, with its share of crude steel demand rising from 15% in 2020 to 20% in 2025; in the automobile sector, the increased penetration rate of NEVs and model upgrades provided rigid support for steel demand, with its share rising from 5% in 2020 to 7% in 2025; the home appliance sector, under steady product iteration and export demand, maintained its share at around 2%; and the shipbuilding sector, amid a cyclical bottoming out and enhanced competitiveness of Chinese shipyards, saw a slight increase in its share, reaching 2% in 2025.

II. Future Outlook: Resilience of Manufacturing Both Internally and Externally Supports the Basic Steel Demand
Looking ahead to 2026–2030, China's steel demand will enter a critical phase of structural reshaping against the backdrop of a mild overall decline. From the perspective of total demand, it is expected that national steel consumption will gradually decrease from 905 million mt in 2025 to 859 million mt in 2030, with an average annual decline of about 1%, entering a stable downward channel under total volume control. Among this, the steel demand in manufacturing (machinery, automobiles, home appliances, and ships) will continue to grow, becoming the core force supporting steel consumption. It is projected that the steel usage in manufacturing will steadily climb from 280 million mt in 2025 to 300 million mt in 2030, with its share of total crude steel demand rising from 31% to 35%.

Over the next five years, the four major sub-sectors within the manufacturing industry will exhibit differentiated development trends in their crude steel demand, with exports becoming a crucial breakthrough point for the development of the manufacturing sector. The machinery industry, driven by both domestic and international demand, will continue to lead, serving as the absolute mainstay in boosting steel demand growth; the automobile industry, while maintaining a slight increase, will see an upgrade in steel use due to the transition towards new energy and lightweight vehicles; the home appliance industry, relying on its stable demand, will support the basic level of the industry; and the shipbuilding industry, following the fluctuations of the global shipping cycle, will first rise then fall, showcasing a typical cyclical recovery and return. Overall, steel demand over the next five years is expected to exhibit a clear characteristic of "total contraction and structural upgrade." Relying on the resilience of domestic demand and the increase in external demand, there are still expectations for stable growth in steel used in manufacturing. This not only provides a demand floor for the steel industry but also drives the industry's transformation from "scale expansion" to "high-end, green, and international." It points the way for steel enterprises to focus on special steels and high-end sheets & plates.