On September 15, the China Iron and Steel Association (CISA) issued a nationwide proposal urging steel enterprises to exercise self-discipline in production control and inventory reduction. The initiative, released via Zhitong Finance, calls on companies to take proactive measures and strictly adhere to the "Three Fixes and Three Don'ts" operational principle, prioritizing profitability while aligning production schedules with market demand.
The proposal emphasizes the urgent need for steelmakers to leverage their market entity status to swiftly lower the currently elevated inventory levels, thereby fostering a dynamic balance between supply and demand. Companies are strongly urged to resist competing for market share through below-cost pricing and to consciously regulate their market conduct to ensure fair competition.
Leading enterprises are expected to set an exemplary role, while small and medium-sized firms are encouraged to enhance coordination and collaboration. This collective effort aims to stabilize the market environment and lay a solid foundation for a successful start to the steel industry's "15th Five-Year Plan" period, according to the full text of the initiative released on September 15, 2026.
The communication highlights that while China's steel sector boasts a robust industrial base—excelling in product quality, equipment technology, manufacturing capability, environmental protection, green and low-carbon development, and asset quality—it has entered a new phase of "reduction and optimization" after years of "incremental growth." Since the beginning of 2026, the industry has been characterized by strong supply, weak demand, low prices, and thin profitability.
Domestic steel demand has continued its downward trend, with both social and enterprise inventories reaching multi-year highs. This has led to fluctuating and declining steel prices, a significant drop in core business profits, and considerable operational pressure for companies across the sector. The proposal asserts that while the problem originates on the demand side, the fundamental solution lies in supply-side reforms within the steel industry itself.
The initiative outlines three key directives. First, it calls for strict implementation of production capacity controls, deeming this the most effective measure to address the current industry dilemma and a critical step toward high-quality development. The entire industry is urged to elevate political awareness, strengthen overall perspective, resolutely meet production control requirements, and condemn any output exceeding approved levels to achieve annual targets.
Second, it reiterates the commitment to self-regulated production and inventory reduction. Third, it emphasizes the full utilization of the industry's price supervisor team. On one hand, steel companies must firmly reject predatory pricing tactics; on the other, the supervisory role of the price oversight team should be maximized, with leading companies serving as models and SMEs ensuring synchronized action to collectively maintain market stability and secure a favorable outset for the "15th Five-Year Plan."