Posted on 12 Jan 2026
China's construction steel prices will fluctuate within a narrow band this month, Mysteel predicts in its latest monthly report on the sector. Recovering prices of steelmaking raw materials like coke and iron ore are likely to lend some support to prices from cost side, but weakening market fundamentals may also pose some downside risks to prices, it warns.
The domestic construction steel market continued to pick up in December, with spot prices posting on-month gains. On December 31, Mysteel assessed China's national price of HRB400E 20mm dia rebar at Yuan 3,324/tonne ($476/t) including the 13% VAT, up by a larger Yuan 33/t from November 28 compared to the Yuan 31/t on-month increase in October.
Firmer prices for long steel last month can be largely attributed to recovering market fundamentals, the report highlighted, represented by the decline in inventories held by both steel mills and traders.
The tonnage held in commercial warehouses in the 35 cities Mysteel follows totalled 4.43 million tonnes as of December 31, slumping by 26.5% or by 1.17 million tonnes from end-November. Moreover, the combined inventory of rebar and wire rod held by the 137 Chinese steel mills Mysteel covers stood at 1.8 million tonnes as of the same day, lower by 7% or 135,000 tonnes on month and hitting at the lowest level since last February.
However, the decline is expected to be reversed this month as actual demand is forecast to drop, the report indicated. It noted, for example, that building projects in more regions of China will halt work amid falling temperatures and ahead of the upcoming Chinese New Year Holiday in mid-February.
On the production side, China's construction steel output continued to contract in December, serving as another important factor underpinning long steel prices.
By end-December, weekly rebar output among the 137 Chinese steelmakers under Mysteel's coverage had dropped by 8.7% or 178,600 tonnes on month to 1.88 million tonnes. Similarly, weekly output of wire rod among the 92 surveyed mills Mysteel checks had also retreated on-month, falling by 7.4% or 60,700 tonnes to 821,700 tonnes.
But production of steel longs is expected to rebound this month, mainly driven by better profit margins, the report noted. For instance, weekly rebar output is predicted to fluctuate within the range of 1.8-2 million tonnes in January, according to the report.
As of December 31, China's electric-arc-furnace steel makers could earn Yuan 107/t on average from selling their rebars, trending higher than the Yuan 74/t profit margin in late-November, according to Mysteel's assessment.
Source:Mysteel
