Steel Market Sees Moderate Rebound as Pre-Holiday Restocking Begins
September 16, 2025

China’s steel market showed signs of moderate recovery this week, driven by pre-holiday restocking demand and macroeconomic policy support. Futures prices rose, with rebar and hot-rolled coil gaining approximately 0.9%, while coke prices surged by 4.5%. Spot prices followed suit, with rebar and hot-rolled coil increasing by ¥20/ton.

Demand and Supply Dynamics
Despite the uptick, demand for construction steel (especially rebar) remains weak, with inventories continuing to accumulate. However, manufacturing-oriented steel products like hot-rolled coil saw improved demand, supported by stable consumption from automotive and appliance sectors. Hot-rolled coil inventories decreased by 10,200 tons last week, while rebar inventories rose by 13,860 tons.

Steel production levels are recovering slowly, with daily crude steel output from key mills rising 7.2% in early September compared to the previous ten days. Nevertheless, steelmakers face profitability challenges, with only 60.17% of sample mills operating at a profit.

Policy and Cost Factors
Macroeconomic policies are providing tailwinds. China’s State Council emphasized stimulating private investment in sectors like advanced manufacturing and new infrastructure. Additionally, the government’s push to curb "low-price无序竞争" (disorderly competition) has bolstered market sentiment.

Cost pressures are mixed. Iron ore prices stabilized due to pre-holiday restocking demand, while coke prices faced a second round of cuts ¥50-55/ton. However, scrap steel prices strengthened, with leading mill Shagang raising purchase prices by ¥50/ton.

Industry Outlook
Short-term price increases are expected ahead of the National Day holiday (October 1-7), as downstream users replenish inventories. However, the property sector’s persistent weakness—investment fell 12.9% year-on-year in January-August—continues to weigh on overall steel demand.

The steel industry remains cautiously optimistic, balancing policy support against fundamental challenges. Market participants will closely monitor post-holiday demand and policy implementation for further direction.