China's steel industry faced weak demand relative to supply and declining profitability in the first three quarters of 2026, the China Iron and Steel Association (CISA) said at its third-quarter briefing on October 30.

CISA Vice Chairman Tang Zujun said the industry was also experiencing lower exports, high inventories, low steel prices and rising costs. The combination of supply-demand imbalance and sharply higher fuel prices has increased pressure on steelmakers.

High inventories and weak demand can make it harder for producers to pass higher fuel costs on through steel prices, putting margins under pressure. Lower exports add to the supply-demand challenge, although the briefing summary does not establish how much each factor contributed to the decline in profitability.

Whether those pressures ease will depend in part on changes in demand, inventories, steel prices and fuel costs. The direction of exports will also matter to the industry's supply-demand balance.