Posted on 03 Jul 2025
China's construction steel prices are expected to fluctuate at low levels during the second half of 2025, possibly with intermittent rebounds, according to Mysteel's latest forecast on the sector. Mysteel's absolute price index for rebar may average around Yuan 3,150/tonne ($440/t) this half, mostly ranging between Yuan 3,000-3,300/t, the report suggests.
The country's construction steel market is likely to see prices trend downward initially before rising as the half progresses, with a higher probability of a rebound emerging in late Q3. However, the extent and sustainability of any recovery will depend largely on how effectively macro policies for the real estate industry are implemented and whether real demand in the construction sector improves, Mysteel notes.
During July and August, construction steel prices are expected to move within a narrow band, with limited upside likely unless sentiment improves. From September to October, as the hot and humid weather conditions of summer subside, construction activity is likely to recover, especially in the infrastructure and public housing segments, helping to lift end-user demand and improve purchasing sentiment. This could support a temporary price rally.
In November and December, prices may spike again under the influence of the usual year-end construction rush and winter restocking, but could retreat quickly as user demand fades, according to the forecast.
On the supply side, construction steel production has already declined from last year due to weaker margins and limited demand. Electric-arc-furnace mills are operating at a loss in many regions, while blast-furnace mills continue to enjoy support from lower coking coal and coke prices. As a result, output has returned to more rational levels and is expected to remain low in H2.
Mysteel estimates that rebar output in the first half of 2025 reached 99.8 million tonnes, down 6.3% on year, while apparent consumption fell 6.7% on year to 95.5 million tonnes.
While speculative buying remains limited, recently announced central government measures have helped to brighten expectations. Policies such as housing inventory repurchase programs, the expansion of the developer "whitelist" for financing, and improvements in mortgage access all aim to restore confidence in the real estate sector.
In addition, the increased issuance of special-purpose bonds and targeted fiscal spending on infrastructure projects may provide further support to steel demand in the second half, Mysteel pointed out.
Nevertheless, structural challenges continue to weigh on the market. Persistent debt pressure in the property sector, tight local government budgets, and global macroeconomic uncertainties are likely to constrain any demand-side recovery, Mysteel cautioned.
Domestic demand for construction steel has continued to decline, while exports have risen sharply. In H1, China's apparent consumption of construction steel fell 10.5% on year to 137 million tonnes, while exports surged 52.2% to 7.59 million tonnes, Mysteel estimated.
In response to the weak domestic demand, steel producers have proactively controlled production and inventory levels, while the market has also actively destocked. With export volumes steadily rising, the current trend of inventory reduction is expected to remain in place in the second half, according to Mysteel's predictions.
Source:Mysteel Global
