"Domestic Steel Demand Expected to Recover in the Second Half of Next Year"

Meritz Securities Research Report

There is a forecast that domestic steel demand will recover once the effects of China's stimulus measures and restructuring in the second half of next year become evident through indicators.

Jang Jae-hyeok, a researcher at Meritz Securities, stated in a report released on the 26th, "It is not entirely impossible to find signs of industry recovery in 2025," adding, "In the second half of 2025, the effectiveness of China's stimulus measures and restructuring will be confirmed through indicators, and domestic demand is also expected to recover."

Researcher Jang explained that the steel industry, which was expected to recover this year, is still going through a difficult period as reflected in the third-quarter performance. He analyzed, "This is due to external factors such as the continued slowdown in China's real estate market, weak steel demand, and exports of low-priced steel products, as well as the domestic construction market slowing down, leading to weak demand for rebar and long products."

Researcher Jang noted, "It is true that this industry condition is difficult to improve immediately unless there is a large-scale stimulus from China that far exceeds expectations," and added, "China's economic conditions also make it difficult to easily expand the fiscal deficit."

He predicted that rebar demand will recover with a time lag. Researcher Jang said, "Although China's stimulus measures focus on restoring local government fiscal soundness and reducing real estate inventory, it cannot be said that there is no effect in generating new demand, and a strong steel production cut policy (implementation measures) is also expected ahead of the 15th Five-Year Plan (2026?2030)."

He continued, "Domestic demand has seen a gradual recovery in new construction starts, and rebar demand is expected to recover with a time lag," adding, "Investigations into dumping by various countries, unable to tolerate the volume of low-priced Chinese steel exports, have also begun."