Ask AI · How can Nanjing Steel Co., Ltd. drive profit growth with high-end products?

The sales share in the real estate and infrastructure sectors is now down to just 10%.

Author | Xiao Se

Editor | Xiao Bai

In corners that few people pay attention to, China’s steel industry is seeing a rebound in 2025.

According to data from the China Iron and Steel Association, in 2025, key statistics steel companies achieved total profit of 115.1 billion yuan, a year-on-year increase of as much as 168%, effectively wiping out the slump since 2022; in the same period, the average sales profit margin was 1.9%, also up by 1.13 percentage points year over year.

（Source: China Iron and Steel Association; Chart design: Value Think APP）

On March 17, long-established steelmaker Nanjing Steel Co., Ltd. (600282.SH) released its 2025 annual report, which just happens to give us another excellent observation window.

Falling coal prices combined with high-end positioning helps profitability rebound

In 2025, Nanjing Steel achieved sales volume of 9.24 million tons of all types of steel materials, down 0.5% year over year, and generated operating revenue of 57.99B yuan, down 6.2% year over year; the performance on the revenue side is not particularly impressive.

（Source: Value Think APP）

Fortunately, net profit attributable to shareholders was 2.87B yuan, up 26.8%; after excluding the stock-price gain brought by the company’s holding of Tiangong Shares (920068.BJ), profit from non-recurring items was also 2.47B yuan, up 13.0% year over year. Both profit figures hit the highest levels in 4 years.

（Source: Value Think APP）

Gross margin for the year was 14.1%, up 2.2 percentage points year over year; net profit margin was 4.8%, up 1.2 percentage points year over year, and also 2.9 percentage points higher than the industry average for the same period; the non-recurring net profit margin was also 4.3%, up by about 0.7 percentage points year over year.

Evidently, the highlight of this annual report lies in the improvement in profitability.

（Source: Choice terminal; Chart design: Value Think APP）

In its annual report, Nanjing Steel mentions that in 2025 the average CSPI comprehensive steel price index was 93.19, down 9.1% year over year. The average Platts 62% iron ore price index was 102.43 USD/ton, and its year-on-year decline of 6.4% was lower than that of steel prices, meaning profitability capacity was not truly improved.

Meanwhile, during the year, the average price of Anyze coking coal was 1,411.11 yuan/ton, down sharply by 26.66% year over year; the average price of benchmark-grade coke at Rizhao Port was 1,472.24 yuan/ton, with a year-on-year decline also as high as 25.24%.

Typically, fuel costs account for about 20%-30% of the cost in steelmaking. The downward move in this cost is one of the drivers behind Nanjing Steel’s profitability improvement, and it is also a key factor in the broader rebound of the steel industry.

In addition, as a long-established steel enterprise, Nanjing Steel’s own differentiated advantages are also a factor. In recent years, the company has continued to focus on advanced steel materials with high-end positioning.

Guotai Junan Securities previously compiled statistics: among listed steel companies in 2024, Nanjing Steel’s net profit per ton of steel ranked second, second only to CITIC Pacific Special Steel (000708.SZ). Its EBITDAn per ton of steel was also the second highest in the industry, behind only Fushun Special Steel (600399.SH).

In 2025, the sales volume of the company’s advanced steel materials reached 2.83 million tons, accounting for 30.5% of total steel product sales, up 2.4 percentage points year over year. And this portion of high-end products had a gross profit margin of 20.9%, up 3.7 percentage points year over year.

The continued push toward high-end positioning and the increase in the value share of high-end products ultimately show up in Nanjing Steel’s profitability as well.

Decouple from real estate; accelerate going global

Besides the decline in fuel costs, are there other tailwinds for the steel industry in 2025?

The China Iron and Steel Association has noted that the steel industry’s efforts to resist “involution” have already produced results in 2025. Based on the data, full-year crude steel output fell to 961 million tons, down 4.4% year over year, marking two consecutive years of negative growth, with total production cuts exceeding 60 million tons; pig iron output was 836 million tons, down by about 3%.

However, demand-side weakness remains. Full-year domestic apparent consumption of crude steel was 829 million tons, down 7.1% year over year. The decline on the demand side is more severe than on the supply side, failing to support a rebound in steel prices.

One piece of good news is that in 2025, the share of steel used in the construction industry fell to 49%. The share of steel used in the manufacturing industry first surpassed construction, rising to 51%, and the structure of steel product varieties has been continuously optimized as downstream demand changes.

Compared with the construction industry, which is closely tied to real estate and infrastructure, the upgrading of manufacturing is a longer-term trend, and steel used in manufacturing will clearly benefit.

As for Nanjing Steel itself, in 2025 the sales share from the real estate and infrastructure sectors was only 10%. More than 70% of its products are sold to manufacturing sectors such as shipbuilding, automobiles, new energy, and construction machinery—essentially completing a decoupling from the construction industry.

（Source: Nanjing Steel’s 2025 annual report）

In addition, according to statistics from the General Administration of Customs, in 2025 China’s cumulative steel export volume was 119 million tons, up 7.5% year over year; going global has become a new growth point for demand.

Nanjing Steel is also the same: in 2025, the company’s export volume of steel products was 1.63M tons, up about 9%, setting a new historical record.

At present, the company has established stable cooperation with more than 60 countries worldwide and over 300 customers, and it has dense deployment in the Middle East market. It has also reached long-term strategic partnerships with Saudi Aramco, Abu Dhabi National Oil Company, and the Emirates National Oil Construction Company, among others.

During the year, acid-resistant pipeline steel became Nanjing Steel’s third “single-manufacturing industry champion product,” and for the first time in China it passed certification from Saudi Aramco, officially entering the latter’s offshore engineering projects.

With factors such as manufacturing upgrading and faster going global driving the momentum, management expects that in 2026 Nanjing Steel will continue to perform steadily and improve overall: the forecast target production of steel is 9.78 million tons, corresponding to an increase of about 4.8%; the target total operating revenue is 58.5 billion yuan, corresponding to an increase of about 0.9%.

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