[SMM Analysis] Anti-Dumping Investigation Arrived China's Grain-Oriented Silicon Steel Exports Encountered Major Changes

[SMM Analysis] China's Grain-Oriented Silicon Steel Export Competitiveness Continues to Strengthen, Import Substitution Progress Continues to Advance

[SMM Steel] Austrian steelmaker voestalpine finalized expansion plans for its greentec steel program, targeting a complete transition to electrified steel production at its Donawitz plant by 2030. The company will debut a new electric arc furnace (EAF) powered by green electricity in 2027, operating alongside traditional blast furnaces until decommissioning one unit in 2029. An approved EUR 100 million expansion budget will upgrade power systems, add a secondary metallurgy line, and improve scrap logistics by 2030, pending final funding approvals. This second stage will lift annual CO2-reduced steel capacity from 850000 tonnes in 2027 to 1.5 million tonnes by 2030, cutting site emissions by over 90% from 2019 levels. The transformation will close existing blast furnaces and the sinter plant, indirectly securing more than 5000 regional jobs. Core equipment installations begin in fall 2026.

HRC prices: Over the coming year, from 2026 to 2027, China has nearly 40 million mt of HRC capacity projects under planning and construction, with production expected to increase further in 2026. Demand side, China's macro policies are expected to remain accommodative, and the manufacturing sector is likely to continue introducing policies to stimulate consumption, with demand expectations staying resilient. However, affected by anti-dumping measures and export structure adjustments, the decline in HRC exports will weigh on the domestic high-supply pattern. Overall, HRC prices are expected to continue hovering at lows in 2026. But considering that overseas geopolitical conflicts are pushing up inflation expectations and transmitting to commodity prices, coupled with coal and coke prices hitting bottom in 2025 and entering a new recovery uptick cycle, against the backdrop of cost push, the average HRC price may rebound slightly compared to 2025. Looking ahead to the next five years, considering that the peak period of new production capacity has passed, with the accelerated promotion of industry mergers and reorganizations and the continuous optimization of the capacity structure, HRC supply growth is expected to gradually slow down and stabilize starting from 2027. SMM expects that around 2028, a policy package of supply-side production restrictions plus steel export scale tightening may re-emerge, and the improvement in the overcapacity contradiction may bring about a round of upside opportunities for HRC prices. However, unlike the intensity of the 2015 supply-side reforms that were coupled with real estate easing and shantytown renovation destocking policies, after the phased capacity removal ends, the overall downward trend in China's steel consumption will be hard to reverse, which will limit the upside room of this HRC price rally driven by supply-demand imbalance easing. Additionally, the supply-demand pattern of iron ore trending looser will also pull down costs, and HRC prices are expected to come under pressure again after a brief rise. Steel mill profits: Considering that China's surplus steel capacity is resolved through steel exports, this necessitates China's steel prices to stay relatively low to support price advantages and orders, which will also limit the upside room of China's steel prices, steel mill profits are expected to remain at low marginal levels in H2 2026. China Hot-Rolled Coil Annual Supply-Demand Balance （ The line chart represents China's HRC price, and the bar chart represents the HRC balance. ）

H1 Price Review: In H1 2026, China’s grain-oriented silicon steel market fluctuated overall, with prices first suppressed and then rebounding. At the start of the year, market prices edged down, but as downstream demand gradually recovered, prices saw a rebound. Performance diverged notably by product type: competition intensified for regular grades amid mediocre demand, keeping prices generally weak; high-end high-permeability grades, supported by rigid demand from power infrastructure, remained firm throughout. On the supply side, regular grades were in ample supply and competition intensified, while high-end products, limited by technological barriers, saw constrained capacity deployment and persistently tight supply. The demand side showed pronounced structural divergence, with ongoing UHV construction and power grid upgrades sustaining solid rigid demand for high-end products, whereas demand for regular grades remained weak. H1 Fundamentals Review: From a production perspective, the production schedule of grain-oriented silicon steel in China in H1 2026 followed a trend of rising, then falling, and then rising again. Only the January-February production schedule volume exceeded the level in the same period of 2025, while the schedule from March to June all fell short of the year-earlier level. In March, it dropped to the H1 low of about 171,000 mt, and in May-June, it recovered to around 183,000 mt as production arrangements were stepped up. However, the overall production schedule center was lower than in H1 2025, and Q2 saw a marked contraction in production activity. Over the same period, the capacity utilization rate trend was highly synchronized with the production schedule. In January-February, the utilization rate was slightly higher than last year, then declined continuously from March to April, hitting the H1 low of 74% in April, and rebounded to 76% in May-June as the schedule recovered. For each month of H1, the utilization rate was significantly lower than the same period in 2025, with the full-year range kept at 74%-81%. This diverging pattern—"slight strength at the start of the year and simultaneous weakening of production schedule and utilization rate in Q2"—indicates that downstream demand support in H1 was weaker than in 2025. Enterprises proactively lowered their Q2 production plans, and the pace of capacity commissioning slowed down. Even with moderate supplementary production in May and June, overall actual operating loads remained weaker than in the same period last year. From the perspective of grain-oriented silicon steel consumption driven by power grid installations, overall demand in H1 2026 (January-April) showed a gradual weakening trend, with monthly consumption declining step by step. January marked the H1 demand peak, with total consumption of approximately 150,000 mt, supported simultaneously by PV, thermal power, and wind power. In February, total demand pulled back slightly, with consumption contracting across all sub-sectors. March fell to the H1 trough, as total monthly consumption was under 80,000 mt, and PV and thermal power installation releases slowed markedly. April saw a slight recovery in demand, but the overall volume remained low. In terms of demand structure, solar, wind, and thermal power remained the core consumption sources in H1, together accounting for nearly 80% of consumption, with nuclear power providing a small supplement and hydropower contribution consistently low. In January, thermal power and PV provided strong boosts, while wind power, which saw concentrated year-end commissioning, had limited release in H1. PV, the largest demand segment, saw continuously declining consumption from January to April, becoming the primary factor dragging down H1 demand. Compared with the full year, overall installation demand in H1 (January-April) was far below the two peak season highs of last May and December. The release pace of new installations was weak, with insufficient commissioning increments across all power sources. Overall, the end-use demand for grain-oriented silicon steel exhibited market characteristics of underperforming in the peak season and coming under monthly pressure. H2 Outlook: In H1 2026, only the Phase II 80,000 mt HIB grade grain-oriented silicon steel capacity of Angang Longdu Electromagnetic New Materials in central China came on stream in Q2, with limited new capacity additions in H1. H2 will mark a concentrated period for GO silicon steel capacity commissioning, with enterprises across multiple regions gradually starting up capacity: in east China, Baoshan Iron & Steel Co., Ltd.'s 220,000 mt HIB grade GO silicon steel capacity will simultaneously commence production in H2, Zhejiang Jinlei Soft Magnetic Materials will start up 100,000 mt CGO grade GO silicon steel capacity in Q3, and Jiangsu Zhongsheng Electromagnetic Technology (180,000 mt HIB) and Jiangxi Chongxin New Materials (80,000 mt HIB) both plan to start production in Q4; in central China, Wuhan Iron & Steel Co., Ltd. plans to launch its 200,000 mt HIB grade GO silicon steel capacity in Q3. Looking ahead to H2, market divergence will persist. The industry’s capacity structure continues to optimize, with new capacity focusing on high-end categories. Supported by energy efficiency upgrade policies and power infrastructure projects, rigid industry demand is expected to be steadily released. Overall, ordinary grades still face downward price pressure, while high-end, high magnetic induction grain-oriented silicon steel will maintain a stable to positive trend backed by favorable demand.

【SMM Steel】Australian steelmaker BlueScope has announced that its new Metal Coating Line 7 at Erskine Park, NSW, has entered the commissioning phase. The 415 million AUD project will add 240,000 tonnes of annual ZINCALUME® steel capacity. The new line will significantly enhance coating capabilities and support premium brands including TRUECORE® and COLORBOND®. Production is expected to ramp up progressively through 2026. The investment forms part of BlueScope's broader strategy to strengthen Australia's domestic steel supply chain and improve long-term supply reliability for high-value steel products.

Recently, the ACC cooling system renovation project for the 4100mm wide and heavy plate area of Baosteel Thin Plate Plant, with overall design by Baosteel Design Institute, successfully achieved a one-time hot load test run. This key renovation will comprehensively reshape the technological landscape of Baosteel's wide and heavy plate products, injecting strong momentum into the enterprise's high-end steel capacity upgrade. Centered on system upgrading and capability enhancement, this renovation upgraded the original ACC laminar cooling system, simultaneously added a pre-straightening machine, and comprehensively optimized supporting auxiliary facilities including water treatment, automation, power supply and distribution,

Tata Steel’s latest performance shows a company moving from a traditional volume-based steel business toward a more margin-focused and transformation-driven model. It is driving growth and profitability, financial performance is recovering through better margins and cost control, while the company’s key business activities are increasingly focused on downstream expansion, raw material security and low-carbon steelmaking.

I. Background of China's Demand Decline ◼ In 2026, the global iron ore market is facing a critical turning point. As the Chinese government continues to strengthen steel capacity regulation and accelerate the industry's green and low-carbon transition, compounded by global trade barriers constraining export opportunities, China's steel production is expected to continue its YoY decline. As the world's largest iron ore consumer (absorbing approximately 75% of seaborne iron ore volume), China's weakening demand coincides with the supply side being about to see massive volume releases—represented by the phased commissioning of the Simandou project with a designed annual capacity of 120 million mt. With supply and demand moving in opposite directions, global iron ore prices will face significant downward pressure. Data source: SMM ◼ Against this backdrop, market attention naturally turns to the world's second-largest crude steel producer— India . As an emerging market in steel consumption, India is driven by infrastructure and real estate as its core growth engines, with downstream steel consumption growing rapidly, strongly propelling the robust development of crude steel production, with an average annual growth rate of 10.5% . Although countries such as Vietnam, Indonesia, Turkey, Mexico, and the US also maintain relatively fast development in their steel industries, over the next five years, the highest compound annual growth rate among these countries is only 5%, forming a notable gap with India. Data source: SMM II. Analysis of India's Iron Ore Supply-Demand Structure 2.1 India's Iron Ore Production Continues to Grow, but Structural Differentiation Is Evident ◼ 2.1.1 India Is Rich in Iron Ore Resources, Ranking Third Globally ◼ From a resource perspective, India is relatively rich in iron ore resources. According to the latest 2024 Iron Ore Resource Annual Report released by India's Ministry of Mines, India's iron ore resource reserves total 35.29 billion mt. Magnetite accounts for 33%, and hematite accounts for 67%. The predominant hematite resources are mainly distributed across Odisha, Goa, Chhattisgarh, Jharkhand and Karnataka — these five states. Among them, Odisha in the east (production accounting for over half of the national total, grade 62%-65%) and Chhattisgarh (home to the large Bailadila mining area, with estimated total reserves of 3 billion mt and grade as high as 65%), as well as Karnataka in the south (primarily magnetite). Data source: SMM 2.1.2 India's Iron Ore Production Is Largely Concentrated in State-Owned Mines ◼ India's iron ore mining market combines state-owned and private enterprises. By company ownership, 36% of mines are controlled by state-owned enterprises, with the remaining 64% controlled by private enterprises. Representative state-owned mine enterprises include National Mineral Development Corporation (NMDC) , Steel Authority of India Limited (SAIL) , and Kudremukh Iron Ore Company (Kudremukh); representative private mine enterprises include Tata Steel Company, etc. ◼ In FY2025/26 (April 2025–March 2026), India's iron ore production is expected to reach 305–310 million mt, up approximately 7% YoY. Specifically: NMDC (state-owned producer) production reached 53.15 million mt, up 20.6% YoY; OMC production reached 40 million mt, up 11% YoY. Commercial mine production grew 15% to 190 million mt, while captive mine production declined 3% to 120 million mt. Production growth was primarily driven by commercial producers, and the supply structure is shifting, but growth is concentrated among a few large producers, meaning supply conditions are not balanced. Data source: WSA, SMM 2.1.3 India's New Iron Ore Project Capacity to Increase by 60 Million mt by 2030 ◼ Facing tight balance pressure from downstream steelmaking capacity expansion on supply and demand, industry leader NMDC is actively implementing a capacity expansion strategy. By accelerating mine development and technological upgrades, it is committed to enhancing supply-side flexibility and resilience to ensure continuous fulfillment of the widening rigid demand in the Chinese market. ◼ In addition to NMDC planning to increase capacity from 45 million mt to 67 million mt in FY2025/26, Tata Steel plans to invest 100 billion rupees (approximately $1.18 billion) over the next five years to expand mining capacity from 40 million mt to 55 million mt, and some private enterprises are also increasing iron ore capacity. Based on existing new iron ore capacity estimates, India's iron ore capacity is expected to increase by 60 million mt by 2030. Data source: SMM 2.1.4 Imbalanced Iron Ore Grade Structure — Both an Exporter and Importer ◼ According to the latest India resource report, although India has abundant iron ore reserves, the raw ore grade varies significantly. Currently, total explored reserves across India stand at 6.21 billion mt, of which high-grade iron ore accounts for 23%, medium-grade ore approximately 42%, and low-grade ore approximately 25%. Based on product classification of India's industry leaders, iron ore with grade above 60% accounts for 43% of production, while that below 60% accounts for approximately 57%, indicating that India's iron ore products are predominantly low-grade. However, India's major steel producers have high raw material requirements and prefer iron ore with grade above 60%. Therefore, iron ore below 60% grade is mainly exported to China, Japan, and other countries. The high-grade shortfall is mainly met through imports from Brazil, Oman, Australia, and other countries. Data sources: India Resources Report, WSA, SMM III. Key Constraints on India's Ability to Absorb China's Declining Iron Ore Demand 3.1 Vast Volume Gap Hard to Bridge, but Incremental Offset Can Provide a Floor ◼ In recent years, China's annual iron ore imports were approximately 1.2 billion mt, while India remains primarily an exporter, with annual exports of 23.56 million mt and imports of 12.31 million mt—its import scale being only 1% of China's. Even if India redirected all its export resources to meet its own demand, the absolute scale would still be two orders of magnitude smaller than China's demand decline. ◼ However, as China's iron ore demand declines and India's demand rises in the future, India's share in the global iron ore market will grow significantly. According to World Steel Association data, China accounted for 59% of global iron ore demand in 2025, while India accounted for only 10%; by 2030, China's share is expected to decline to 52%, while India's will rise to 15%, with particularly impressive growth momentum. The incremental demand from India will offset part of China's decline, providing a floor for iron ore prices. Data sources: WSA, SMM 3.2 Government Policies & Import Grade Restrictions Limiting Imports ◼ Based on India's iron ore import and export data, India's exports in 2025 declined 34% compared to 2024, while imports surged 129%. Despite the massive increase in imports and significant room for further growth driven by rising domestic demand, the Indian government has already introduced measures requiring priority fulfillment of domestic demand and reducing exports, which will to some extent suppress the growth potential of its iron ore imports. Meanwhile, the continued degradation of resource endowments at major global mines has intensified the structural shortage of high-grade ore, making the high-grade resources available for India's future imports relatively limited. Furthermore, as requirements for green steel production increase in and outside China, China's future demand for high-grade iron ore will also rise correspondingly, a trend that will further constrain India's iron ore import capacity. ◼ In the long run, if demand for high-grade ore continues to trigger structural tightness, the price spread between high-, medium-, and low-grade iron ore will continue to widen. Against this backdrop, India's own ore product mix may undergo significant adjustments, and its exports may continue to decline. Data sources: WSA, SMM 3.3 Green Steel Policies Driving Higher Electric Furnace Share, Iron Ore Demand Growth Under Pressure to Slow Down ◼ From a production process perspective, India's share of electric furnace steelmaking far exceeds China's, at approximately 30% in 2024. According to India's *National Steel Policy (2017)*, the country plans to raise its annual crude steel capacity to 300 million mt by FY2030 (ending March 31, 2031), with blast furnace-converter process capacity accounting for 60%-65% and electric furnace process capacity accounting for 35%-40%. As global carbon emission policies advance further, the share of green steel will increase significantly in the future, which aligns with the electric furnace capacity share target in India's National Steel Policy. Under this trend, the rising share of electric furnace steelmaking will, to some extent, curb the incremental demand for iron ore in India. Data sources: WSA, SMM IV. India's Iron Ore Demand Growth: Sufficient to Offset, Insufficient to Reverse ◼ According to the World Steel Association's forecast, global total iron ore demand is expected to maintain a modest growth trend from 2026 to 2030. China's iron ore demand is expected to decline by 8%, a reduction of approximately 113 million mt, while benefiting from continued expansion in steel production, India's total iron ore demand over the same period will grow by 55%, an increase of approximately 128 million mt. Meanwhile, based on estimates of global iron ore project capacity and commissioning pace, by 2030, approximately 300 million mt of new iron ore capacity is expected to be added globally on a cumulative basis. Overall, although India's demand growth is robust, it remains difficult to offset the large-scale supply increase on a global scale. However, the rise in India's demand can, to some extent, counteract the negative impact of declining demand from China, providing floor support for iron ore prices. ◼ In addition, as global carbon emission policies advance further, blast furnace capacity will gradually contract and crude steel production will trend downward, while the share of direct reduced iron (DRI) and electric furnace steelmaking is expected to continue rising. Against this backdrop, demand for high-grade iron ore will grow significantly in both China and India, which will further intensify the structural tightness in the high-grade ore market, thereby pushing up high-grade premiums. The price spread between high- and medium-grade iron ore is expected to widen notably in the future. Data source: SMM Data source disclaimer: Data other than publicly available information is derived by SMM based on public information, market communication, and SMM's internal database models, for reference only and does not constitute decision-making advice. Note: This article is an original article of this official account. For reprinting, whitelisting, cooperation, or other needs, please contact us. Without permission, it is prohibited to reprint, modify, use, sell, transfer, display, translate, compile, disseminate, or disclose the above content to third parties in any other form, or license third parties to use it. Otherwise, once discovered, SMM will pursue legal liability for infringement through legal means, including but not limited to demanding liability for breach of contract, return of unjust enrichment, and compensation for direct and indirect economic losses. Scan the QR code to get information for free

[SMM Steel] Feralpi Stahl, part of Italy’s Feralpi Group, is increasing annual steel capacity at its Riesa plant in Germany from 1 million mt to 1.3 million mt through a new Danieli rolling mill commissioned last May. The new facility currently operates on a two-shift basis and is expected to receive final equipment certification this summer. The mill targets annual rebar-in-coil output of 400,000-450,000 mt, with plans to shift to three-shift operations by 2027 depending on market conditions. The company also said it will continue investing in scrap processing operations.