Posted on 24 Dec 2025
After sliding steadily throughout this year, Chinese steel prices are expected to climb overall during 2026, supported by the potential decline in steel supply as well as the improved macroeconomic situation, Mysteel's chief analyst Wang Jianhua projected at Mysteel's annual conference in Shanghai last weekend.
"Domestic steel production is set to face tighter environmental constraints," Wang noted, citing the accelerated ultra-low emission transition mapped out for the steel industry and the gradual integration of the steel sector into the country's carbon emission trading scheme.
The rise of investment in carbon emissions reduction – such as buying carbon offsets and building new facilities – will result in additional operation costs to domestic steelmakers, forcing more mills to reduce production due to negative margins, Wang explained.
"China's steel supply may decrease by some 12.5 million tonnes in 2026," he forecasts.
The increasing costs of environmental protection will also press steelmakers to defend their steel sales prices more aggressively next year, Wang believed.
Mysteel's assessment of China's composite steel price in January-November this year averaged Yuan 3,496/tonne ($496.5/t) including the 13% VAT, lower by 9.7% compared with the average price for 2024.
For the coming year, China's steel prices will likely rebound by some 3.3% overall from 2025, Wang predicted.
"China's economy is expected to continue its recovery next year, albeit by a slow pace, which is favorable for steel prices as well," he added.
However, domestic steel prices will still come under the pressure from shrinking demand next year, especially in the export market, Wang warned.
China's decision to place a wide range of steel products under export license management from January 2026 will block a portion of the steel-shipment exports that previously relied on non-compliant channels that the license system will outlaw, he explained.
Moreover, anti-dumping investigations against China's steel products that were initiated by many countries in 2024 are expected to announce their findings in 2026 which most likely will see new duties imposed. At the same time, the European Union's carbon border tax will also officially come into force next year from January 1, Wang added, stressing that these factors will further impede outbound Chinese steel trade.
"China's steel exports in 2026 will probably decline by some 19 million tonnes on year," he estimates.
During January-November this year, China exported a total of 107.7 million tonnes of steel products, higher by 6.7% on year, as reported.
Source:Mysteel
