Global Demand Trends: Structural Growth and Transformation in Parallel
The global hot-rolled steel market will undergo a profound transformation by 2025, with the market size projected to climb from $580 billion in 2023 to $820 billion in 2030, achieving a compound annual growth rate of 6.3%. This growth will be primarily driven by the Asia-Pacific region, which will contribute over 65%, with China's market share projected to increase from 42% to 47%. Within downstream applications, the explosive growth of the new energy vehicle industry is a key driver. Global electric vehicle production is expected to exceed 25 million units in 2025, directly driving an increase of over 18% in demand for high-strength automotive steel. New installed capacity in the wind power and photovoltaic sectors is growing at a compound annual growth rate of 9.4%, driving an increase in demand for corrosion-resistant hot-rolled plate exceeding 5 million tons per year.
In terms of regional market differentiation, Southeast Asia will become China's largest export destination, accounting for 42% of imports in 2025. However, this will require addressing the technical barriers imposed by the CPTPP's rules of origin, which require a carbon footprint of less than 2.1 tons of CO₂ per ton of material. The implementation of the Carbon Border Adjustment Mechanism (CBAM) in the EU market, with a base tax rate of €35/ton of CO₂ equivalent, has reduced China's price advantage by 12-15%. The US market, through the Inflation Reduction Act, has increased the local content requirement for imported hot-rolled coil to 60%. China's exports to the US plummeted 52% year-on-year in January-May 2025.
In-Depth Analysis of Industry Applications
The construction industry remains the primary consumer of hot-rolled steel, accounting for 65% of demand in 2025. Green building concepts are driving the use of low-alloy, high-strength hot-rolled steel, exemplified by Fangda Special Steel's expertise in high-strength, tough, and wear-resistant steel plate. The automotive manufacturing industry is undergoing significant transformation and upgrading, leading to strong demand for high-strength, cold-forming hot-rolled steel. Baowu Group, through technology acquisitions, has increased its production of high-grade products (such as Q355 and Q460) to 38%. In the energy sector, demand for high-strength weathering steel for wind turbine towers is increasing by 20% annually. Hebei Iron and Steel Group has achieved mass production of its 1000 MPa ultra-high-strength marine steel.
Five Core Dimensions for Supplier Selection
1. Capacity and Product Mix
Prioritize companies with capacity utilization rates exceeding 85%, with the global average capacity utilization rate reaching 85.4% in 2025. Focus on the proportion of high-end products. For example, Ansteel Group's DP steel (duplex steel) accounts for 25% of its automotive steel products. Baowu Group has significantly improved its cost advantage by acquiring high-quality iron ore interests through overseas mergers and acquisitions.
2. Quality Certification System
Compliance with the EU's new EN10025-2:2024 standard (yield strength deviation ±15 MPa) and South Korea's KSD3755:2025 standard (pearlite fraction fluctuation ≤5%) is essential. Shougang Group has increased its compliance rate to 89% through TMCP process optimization, while small and medium-sized manufacturers only achieve this at 41%.
3. Logistics and Supply Chain Resilience
To address the 320% increase in freight rates on European routes caused by the Red Sea crisis, it is necessary to assess suppliers' multimodal transport capabilities. The smart container system jointly developed by COSCO Shipping and Baowu Group can monitor freight rate fluctuations on Southeast Asian routes in real time.
4. Environmental Compliance Capabilities
To meet the carbon footprint certification requirements of Vietnam's CPTPP rules of origin, Shagang Group has reduced carbon emissions per ton of steel to 1.8 tons through waste heat recovery technology. The blockchain traceability system, mandatory for the EU in 2026, covers 78 production data items, including energy consumption in the smelting process.
5. Technological Innovation Capabilities
We focus on investments in intelligent manufacturing. For example, Ansteel Group's 5G+ Industrial Internet platform has achieved a 0.05mm improvement in rolling accuracy. In the field of steel for new energy vehicles, Benxi Iron and Steel Group's 1800MPa-grade GPa steel has been certified by Volkswagen.
Risk Response and Strategic Recommendations
Trade Barrier Avoidance
By leveraging RCEP regional value content of ≥55%, we are able to achieve this, such as the stainless steel processing center built by Taiyuan Iron and Steel Group in Malaysia. To address India's BIS certification system, we have established a local testing laboratory, reducing the certification cycle from 4.7 months to 2.3 months.
Raw Material Price Hedging
Adopting iron ore futures hedging strategies, such as Valin Steel's use of iron ore swap contracts on the Singapore Exchange, allows cost fluctuations to be controlled within ±3%. Establishing a strategic inventory system, modeled on Nippon Steel's "V-shaped" inventory management model.
Technology Iteration Path
Investing in high-value-added production lines, such as Baowu Group's million-ton hydrogen metallurgy demonstration project under construction. Establishing joint laboratories with universities, such as the Advanced Steel Materials Research Center established by Beijing University of Science and Technology and Hesteel Group.
Five-Year Outlook
By 2030, the global hot-rolled steel industry will have formed a "4+N" competitive landscape, with a CR4 concentration of 45%. High-end products will account for 50% of the total output, with demand for high-strength silicon steel for new energy vehicle battery casings growing at an annual rate of 12%. The widespread adoption of intelligent manufacturing technologies will reduce overall energy consumption per ton of steel by 15%. Hesteel Chenggang's "dark factory" has achieved full process automation.