[SMM Hot Topic] Under the installation rush in the wind and solar power industry, will the phased outbreak of steel demand become the focus?

In recent years, with China's energy transition, investments and installations in wind and solar power have consistently accounted for a high proportion, while new installations of traditional energy sources remained relatively small. The rapid development of wind and solar power has also driven a surge in steel demand. Wind and solar power generation has been under policy subsidies in recent years, leading to installation rushes before subsidy phase-outs. From the perspective of new installations, wind and solar power experienced a surge starting in 2023, accounting for over 80% of total installations.

On February 9, 2025, the National Development and Reform Commission (NDRC) and the National Energy Administration jointly issued the "Notice on Deepening the Market-Oriented Reform of On-Grid Tariffs for New Energy to Promote High-Quality Development of New Energy" (NDRC Price [2025] No. 136), which had multifaceted impacts on the PV and wind power industries.Many companies rushed to complete installations before June.

According to SMM estimates, China's domestic PV installations consumed 8.3 million mt of steel in 2024, while the wind power industry consumed 12.5 million mt. From January to May 2025, domestic PV installations consumed 5.93 million mt of steel, up 150% YoY. Considering the significant reduction in installation rushes after June, steel demand for PV is expected to weaken in H2. For wind power, new installations in 2025 are projected to exceed 100GW, with a YoY growth rate of around 30%. Under the installation rush from January to May, growth already reached 134%, and wind power installations are also expected to slow down in H2.

The following content is excerpted from SMM's downstream operating rate report:

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