SMM Analysis: Steel Demand Soared in H1 2025 amid Wind and Solar Installation Rush, But Might Dwindle in H2

In recent years, with China's energy transition, the proportion of investment and installations in wind and solar power sector has remained high, while the proportion of new installations in traditional energy sector has been relatively small. With the rapid development of wind and solar power, the demand for steel has also been rising rapidly. Wind and solar power generation have also been receiving policy subsidies in recent years, leading to an installation rush before the withdrawal of different subsidies. The new installations of wind and solar power began to surge in 2023, with installations accounting for over 80%.

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 and Promoting High-Quality Development of New Energy" (NDRC Price [2025] No. 136 Document), which has had multiple impacts on the PV and wind power industries. Many enterprises rushed to install before June.

According to SMM's calculations, in 2024, China's domestic PV installations consumed 8.3 million mt of steel, while the wind power industry consumed 12.5 million mt of steel. From January to May 2025, domestic PV installations consumed 5.93 million mt of steel, up 150% YoY. Considering that the installation rush will significantly decrease after entering June, it is expected that the demand for steel in the PV sector will weaken somewhat in H2. In terms of wind power, new installations in 2025 are expected to exceed 100GW, with a YoY growth rate of approximately 30%. Driven by the installation rush from January to May, a growth rate of 134% has already been achieved, thus it is expected that wind power installations will also slow down in H2.