By the end of the first quarter of 2025, China’s medium and thick plate market found itself at a crossroads, grappling with a sharp decline in inventories even as production capacity expanded rapidly. Social inventory levels fell by 12% year-on-year, while spot stocks at the Lecong Steel Market — China’s largest steel distribution hub — plunged by 42%. The shortage, particularly acute for 12mm medium plates, has been largely driven by mills cutting back production in response to persistently low profit margins.
At the same time, major steel producers are ramping up expansion efforts. Baosteel Zhanjiang is introducing a new smart production line, and Ansteel has upgraded its processes to improve output efficiency. In total, an estimated 15 million tons of new production capacity is expected to come online in 2025, which could exacerbate the short-term supply-demand imbalance.
Market uncertainty remains elevated as the basis difference continues to widen and caution grows around the risks of future overcapacity. Export pressures — including Vietnam’s newly imposed anti-dumping duties and ongoing U.S. tariffs — further complicate the outlook. Nevertheless, resilient sectors such as shipbuilding and offshore wind energy continue to offer pockets of domestic demand, providing a potential foundation for market stabilization in the months ahead.
