Since this year, China's steel industry has faced a conflict between supply and demand, and rising production costs have compressed factories' margins. Market participants said that the demand for steel reached its peak and then fell back, which means that the industry entered a stage of stock adjustment, which was a period of factory mergers and reorganizations.

Through the merger of enterprises to increase the concentration of the steel industry, resolve oversupply, and control production capacity, the profitability of steel mills can return to a reasonable level. In addition to the consolidation of state-owned steel mills, private mills also play an important role in the restructuring process.

The China Iron and Steel Association has already started to promote cooperation and improve the exit mechanism. Judging from the industrial concentration of the top 10 steel industries, the industrial concentration in 2022 is 42.6%; in 2023, it is 41.4%, and in the first three quarters of 2024, it dropped slightly to 40.9%.