Posted on 24 Nov 2025
China's steel prices are expected to stay under pressure for the foreseeable future as a consequence of swollen inventories of finished steel and dull demand as winter sets in, according to the latest monthly report of the China Iron & Steel Association (CISA).
The association pointed out that at the start of this month China entered the traditional off-season for steel consumption with the onset of colder weather in northern China, and steel demand from end-users has cooled measurably.
With the persistent weakness in major end-user sectors including infrastructure construction and real estate development, during October China's steel demand failed to show the uptick in demand usually displayed during the country's mild autumn months.
Steel inventories held by both mills and traders have stayed high compared with the same period last year. As of November 10, inventories of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by CISA's member mills reached 15.49 million tonnes, up 5.9% from the end of October and higher by 13.4% on year.
As of the same day, stocks of the five major steel items in traders' warehouses across the 21 Chinese cities under CISA's regular tracking stood at 8.93 million tonnes, surging by 28.9% on year though lower by 1.3% from ten days earlier.
In addition, China's steel exports may face strong headwinds due to weaker overseas demand, driven by a soft global manufacturing sector and challenging external conditions, such as increasing anti-dumping investigations and the ongoing uncertainty surrounding tariff policies, the association observed. Meanwhile, the earlier front-loading of exports has borrowed from future orders.
CISA quoted statistics of the General Administration of Customs to show that China's steel export volume retreated in October, with the total tonnage down 6.5% on month at 9.78 million tonnes.
Against a backdrop of falling demand and ample raw material supply, domestic steel prices are now being driven primarily by supply, the association argued. During the first ten days of this month, daily crude steel production among CISA's member mills averaged 1.93 million tonnes/day, higher by 6% from the average for late October, as reported.
In its report, CISA called on Chinese steelmakers to curb their steel output on their own initiative to stabilize domestic steel prices, as pressure on the supply-demand balance is likely to mount for the foreseeable future as demand weakens further in winter.
The central government has taken some steps to tackle overcapacity in the steel industry, CISA acknowledged in the report, aiming to help the market regain balance and improve domestic steel mills' profitability.
Late last month, the Ministry of Industry and Information Technology released a draft for public comment advocating that steel capacity "swap" arrangements be made more stringent, saying that the old-for-new swap ratio for ironmaking and steelmaking capacity must be no less than 1.5:1, meaning that the decommissioned capacity must be at least 1.5 times that of newly-built capacity.
According to the new plan, any increase in total steel capacity in several key regions – including the Beijing-Tianjin-Hebei area, the Yangtze River Delta, and the Fenwei Plain regions – is strictly forbidden, as is accepting transfers of capacity from non-key regions and transferring capacity between and among steelmakers themselves.
Additionally, provinces and cities with explicit national targets for controlling total steel production capacity are not allowed to accept any transfers of steel capacity from other regions, as Mysteel Global reported.
Source:Mysteel Global
