China's steel industry swung back into losses in July 2026, squeezed by persistent raw material costs and lackluster domestic demand. 

According to the National Bureau of Statistics (NBS), total industry profits plunged over 50% year-on-year in the first seven months, with July reversing previous profitability.

The downturn stems from diverging downstream consumption: while manufacturing sectors like shipbuilding, automotive, and machinery maintained steady demand for flat steel, the prolonged property slowdown severely suppressed long steel and rebar consumption. 

Despite output cuts across pig iron and crude steel, elevated raw material expenses continued to compress margins. While seasonal restocking in late August may narrow per-ton losses, structural property weakness limits any significant recovery, urging mills to prioritize marginal profit over capacity expansion.