Core Insights - The competitive landscape between Japanese and Chinese steel companies is influenced by structural overcapacity in China's steel industry, low concentration levels, and continuous technological advancements [1][2] - Japanese steel company Nippon Steel has significantly higher profits compared to Chinese counterparts, with its net profit for 2024 at 350.2 billion yen (approximately 16.9 billion yuan), while the top five Chinese steel companies collectively earned less [1][3] - The profitability gap is attributed to Nippon Steel's advantages in raw material costs and product structure, focusing on high-end steel production [3][4] Industry Overview - The Chinese steel industry is facing a structural overcapacity issue, with a concentration rate of only 40% among the top ten steel companies, leading to intense competition and price wars [4][5] - In 2024, the total profit of key Chinese steel enterprises dropped by 50.3% year-on-year, with Baosteel's net profit declining by 38.36% [5][6] - China's crude steel apparent consumption has decreased from a peak of 1.048 billion tons in 2020 to 892 million tons in 2024, indicating a downward trend in demand [6][7] Export Dynamics - Despite increasing steel exports, the average export price has fallen from $847.2 per ton in 2020 to $755 per ton in 2024, reflecting a challenging international market [7][8] - Trade protectionism against Chinese steel products has risen, with 33 anti-dumping investigations initiated in 2024 alone, surpassing the total from 2020 to 2023 [7][8] - Major export destinations for Chinese steel include Vietnam and South Korea, accounting for 11.5% and 7.4% of total exports, respectively [8][9] Technological Advancements - Chinese steel companies are increasingly focusing on technological innovation and product upgrades, with significant developments in high-strength and specialized steel products [11][12] - The industry is urged to shift from scale expansion to enhancing research and development capabilities, with some companies achieving breakthroughs in high-end steel products [11][12] - The Chinese Steel Industry Association plans to implement a new capacity governance mechanism to balance supply and demand effectively [12]