Posted on 03 Dec 2025
Chinese steel prices are expected to move upward overall this month, driven by the improved macroeconomic environment as well as the recovery in market fundamentals, Mysteel's chief analyst Wang Jianhua argues in his latest monthly outlook.
China's national composite steel price ended November with a slight on-month decline at Yuan 3,453/tonne ($488/t) including 13% VAT, lower by 0.1% from the end of October, according to Mysteel's assessment.
Subdued demand from steel end-users placed major downward pressure on domestic steel prices early last month. However, moves by steelmakers to rein in production triggered concerns about potential shortages in steel supply, allowing prices to regain upward momentum in late November, as Mysteel Global reported.
Entering December, positive macroeconomic changes at home and abroad are expected to lift sentiment in China's commodity market further, providing support for steel prices, Wang predicts.
China's Central Economic Work Conference – conventionally held at year-end to set the tone for the next year's economic policies – is expected to convene in mid-December, Wang noted. Given that 2026 marks the beginning of the country's "15th Five-Year Plan", policy plans being finalized by the central government are anticipated to give a strong boost to market confidence, he believes.
In the global market, liquidity has improved since U.S. government departments resumed operations in mid-November after a 43-day shutdown, while the Federal Reserve is highly likely to cut its benchmark funds rate again this month, both of which are favorable for commodity prices, Wang observed.
On fundamentals, the further decline in steelmakers' production will lend some support for steel prices, Wang pointed out, citing the steelmakers' cooled operation activity amid worsening losses on steel sales.
Mysteel's survey showed that during November, the combined hot metal production among the sampled 247 blast furnace (BF) steelmakers Mysteel tracks averaged 2.36 million tonnes/day, lower by some 1.9% compared with the average output in October.
By the end of last month, only 81 of these 247 steel mills said they could make some profits on selling their products, the lowest number since October last year, the survey findings showed.
In addition to production cuts motivated by losses, steelmakers in North China are likely to idle their furnaces more frequently in response to government-mandated production restrictions to ease air pollution this month, Wang predicts. Air pollution tends to be more severe in deep winter as the cold and heavy air traps smoke and fumes close to ground, Mysteel Global noted.
On the other hand, China's steel demand is seen being resilient in December. According to the statistics of CFLP Steel Logistics Professional Committee, the sub index for new orders under the country's Purchase Managers' Index for the steel sector rebounded by 1.3 on month to reach 48.9 in November, as reported.
"Steel consumption is expected to hold up well in both the manufacturing and construction sectors this month," Wang said.
With steel supply shrinking while demand stays firm, steel inventories across China are expected to continue falling in December, Wang projects.
By the end of November, the total stocks of the five major carbon steel products held by steelmakers and trading houses across the 35 cities under Mysteel's monitoring stood at 14 million tonnes, lower by 1.1 million tonnes or 7.4% on month.
"The stocks of these products may drop by another 1 million tonnes during December," Wang remarked.
Source:Mysteel Global
