An In-Depth Analysis of Demand-Side Linkages and Inventory Dynamics

As the largest downstream customer of refractory materials—accounting for approximately 70% of total consumption—the performance of China’s steel industry directly determines the viability of refractory producers. In 2025, China’s crude steel output remained at around 1 billion tons, while the product mix underwent significant structural adjustment.

Linkage Analysis:

1.Acceleration of Electric Arc Furnace (EAF) Steelmaking:

In 2025, the share of EAF steel continued to rise, directly stimulating demand for high-power EAF roof bricks and ladle magnesia-carbon bricks.

2.Demand Driven by High-End Steel Products:

Growth in the automotive, shipbuilding, and new energy sectors has boosted demand for special and high-quality steels, placing higher purity requirements on functional refractories used in clean steel production—such as sliding gate plates and submerged entry nozzles (SENs).

3.Sales and Inventory Strategy:

The steel industry’s destocking cycle has largely ended. By the end of 2025, steel mills generally adopted a “small-batch, high-frequency” procurement strategy, forcing refractory suppliers to improve responsiveness and supply-chain agility.

Recommendations:

Refractory enterprises should closely follow steel mills’ transition toward green EAF-based processes replacing blast furnaces and optimize targeted product inventories accordingly. For oversupplied categories such as conventional alumino-silicate refractories, companies should remain cautious about shrinking market space resulting from the steel industry’s capacity reduction and structural optimization.