Posted on 06 Aug 2025
China's construction steel market is expected to shift from sentiment-fuelled gains to a more fundamentals-based trajectory in August, as the sector's recent optimism fades and supply-demand dynamics return to the spotlight, according to Mysteel's latest monthly report.
While renewed macro support from the central government could still trigger short-term price rebounds this month, a broadly rangebound trend appears more likely in the absence of any significant demand recovery, the report noted.
Construction steel prices in July were supported by bullish policy expectations, a stronger demand outlook following the launch of the mega hydropower dam project on the Yarlung Zangbo River, and firming raw materials prices, the report explained.
As of July 31, China's national price of HRB400E 20mm dia rebar, a bellwether of the steel market sentiment across the country, was assessed by Mysteel at Yuan 3,407/tonne ($474/t) and including the 13% VAT, jumping by Yuan 197/t from end-June.
During July, mill profitability improved to the highest level so far this year, encouraging both blast furnace (BF) and electric arc furnace (EAF) producers to ramp up output. EAF mills in particular were more responsive due to their higher operational flexibility, the report observed.
Domestic construction steel output is likely to see a modest on-month rise this month, though this could add pressure to market supply, the report predicted.
On the raw materials front, earlier price rallies in coke and coking coal lent strong cost-side support to construction longs prices. However, with spot trading activity softening and expectations of further raw material price hikes fading, the likelihood of a correction in raw material costs this month is increasing. Should input prices retreat, construction steel prices may come under renewed pressure, the report warned.
In terms of inventory, July saw weaker-than-expected accumulation in stocks of construction steel, with production cuts offsetting sluggish demand. August could see both mill and trader stocks edge higher, especially if output rises while end-user demand fails to improve, the report suggested.
Total rebar stocks at the 137 mills and held by traders in the 35 cities under Mysteel's tracking amounted to 5.46 million tonnes by the end of July, inching up by 10,800 tonnes but significantly lower by 1.96 million tonnes on year, the latest data indicated.
Last month, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel monitors across the country averaged 102,233 tonnes, declining by 12.2% from the corresponding period last year.
Source:Mysteel Global
