Multiple Chinese Steel Companies See Widening Q3 Losses Amid Shrinking Demand and Rising Costs
nashnova research
China's major steelmakers posted sharply wider losses in Q3, with Ansteel's single-quarter net loss hitting RMB 1.98 billion — more than double the year-ago figure. Shrinking property and infrastructure demand plus surging coking-coal costs are squeezing the industry from both ends, and rising export volumes are already stoking global trade-friction risks.
How bad are the losses?
Ansteel (鞍钢股份) — the listed core of Angang Group and the world's third-largest steelmaker by output — posted a Q3 net loss of RMB 1.98 bn, more than double the RMB 876 mn loss a year earlier. This means → one quarter's loss nearly matched the entire first-half loss of RMB 2.04 bn.
Gansu-based Jiuquan Iron & Steel's Hongxing unit swung to a Q3 net loss of RMB 813 mn, versus just RMB 61 mn a year ago — a 12× blow-up. In plain terms = a minor loss became a major one in twelve months.
Multiple subsidiaries of Baowu Group followed the same trajectory: Shandong Iron & Steel lost RMB 146 mn, Chongqing Iron & Steel RMB 125 mn, Maanshan Iron & Steel RMB 108 mn, Xinjiang Bayi Iron & Steel RMB 220 mn — the last two were profitable in the year-ago quarter.
Where is the money going — what does "squeezed from both ends" mean?
Selling prices are falling: domestic oversupply is pushing steel prices down. Property and infrastructure — the two largest steel-consuming sectors — face "continued demand contraction" and "sharp declines" in fixed-asset investment. In plain terms = steel's biggest buyers — builders and road-makers — are pulling back.
Input costs are rising: coking coal and other raw-material prices have been "persistently climbing" with "significant volatility." Ansteel said its cost-cutting efforts "remain insufficient to offset the narrowing gap between procurement and selling prices."
This reflects a structural profit squeeze, not a cyclical dip — a dynamic where the more steel you sell, the more you lose.
Can exports provide a lifeline?
Baosteel (宝山钢铁, Baowu's listed flagship) reported export orders of 5.87 million tonnes in the first three quarters, up 704,000 tonnes year-on-year. Xinjiang Bayi said it would push further into Tibet and overseas markets, aiming to "expand export volumes and raise market share in Central Asia."
But higher volumes are already triggering friction: China's commerce and customs authorities introduced a steel-export licensing system covering roughly 300 product categories at the start of the year. Overall steel exports fell 2.6% year-on-year in the first three quarters, yet absolute volumes remain elevated and the recent pace has quickened.
This means → exports are currently the only channel to absorb excess capacity, but every additional tonne shipped raises the trade-friction risk — how long this route stays open is the single most important variable ahead.
Will Q4 bring relief?
Maanshan Steel explicitly warned that Q4 difficulties will persist, citing "insufficient demand, price pressure, and intensifying competition."
The broader "strong supply, weak demand" pattern shows no sign of reversing: property has not bottomed, infrastructure investment growth is slowing, and domestic steel consumption is unlikely to recover near-term.
In plain terms = there is no visible inflection point. Steelmakers can either keep cutting costs or push more exports — but both paths are narrowing.
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