Goldman Sachs expects Chinese steel producers to face a prolonged period of weak profitability, citing slow progress in capacity reduction and persistently high export volumes, according to a Bloomberg report.
The US-based investment bank has cut earnings forecasts for Baoshan Iron & Steel Co. and Maanshan Iron & Steel Co. for fiscal years 2026–2027, while projecting larger losses for Angang Steel Co. over the same period. Goldman Sachs has also lowered its gross margin assumptions for key steel products, including rebar and hot-rolled coil, reflecting expectations of only modest price gains.
The bank noted that efforts to curb overcapacity are facing near-term challenges, particularly compliance with ultra-low emissions standards and the reclassification of producers meeting these criteria. These factors are slowing the pace of effective capacity cuts, despite continued policy support aimed at addressing structural oversupply.
Goldman Sachs added that the weaker outlook for China’s steel sector could weigh on iron ore market sentiment, although strong steel exports may partially offset softer domestic demand. Iron ore prices have traded within a narrow range of $102–108 per metric ton since late August, while port inventories in China have risen to their highest level since November 2024, adding pressure to the near-term market outlook.
VietnamSteel by Hoa Sen Group
