Posted on 06 Jul 2026
China's construction steel prices are expected to witness small gains during the second half of 2026, buoyed mainly by firm cost support and reduced supply, according to Mysteel's latest report on the sector. Mysteel's composite index of domestic rebar prices may range between Yuan 3,200-3,500/t ($472-516/t) and average around Yuan 3,380/t for the whole year. If realized, this would represent a 1.6% on-year increase, the report noted.
China's construction steel prices are expected to witness small gains during the second half of 2026, buoyed mainly by firm cost support and reduced supply, according to Mysteel's latest report on the sector. Mysteel's composite index of domestic rebar prices may range between Yuan 3,200-3,500/t ($472-516/t) and average around Yuan 3,380/t for the whole year. If realized, this would represent a 1.6% on-year increase, the report noted.
During this year's January-June half, the index moved up marginally by 0.8% from the H1 average last year to Yuan 3,357/t, thanks to the surge in May when strengthening cost support and improving end-user demand gave a significant boost to prices of rebars, wire rods and sections such as channels and beams, the report noted.
China's apparent consumption of rebar nationwide reached 84.6 million tonnes in H1, dropping by 10.5% on year, while that of wire rod also declined by 4.2% from the first six months last year to sit at 45.98 million tonnes, according to Mysteel's estimation.
But since June, heavy rains and record temperatures have been impacting much of China and the situation is expected to persist this month and next, as reported. This will continue impacting end-user demand and weigh on construction steel prices, the report cautions.
Mounting inventories are another concern for market players. As of June 30, the combined tonnage of rebar and wire rod held by traders in the 35 Chinese cities under Mysteel's coverage had surged by 69.4% or by 2.26 million tonnes since January to top 5.51 million tonnes.
From September to October, as the hot and humid weather conditions of summer subside, work on construction projects usually accelerates as the cooler weather returns, leading to the autumn peak season for long steel consumption. With some cost-side support, this should ultimately lead to a price rally, the forecast notes.
However, depending on the speed with which colder weather in Northern China arrives this year, end-user demand could begin retreating as soon as early November if the drop in temperatures causes work on construction to be suspended, the report notes. This would intensify the mismatch between supply and demand again and pose pressure on prices of steel longs, the report warns.
One of the key factors contributing to the mild price rise in the second half would be the contraction of long steel demand, the report highlights.
On one hand, during this year's January-June half, many steelmakers controlled their pace for long steel production due to lower profit margins and weaker-than-expected long steel demand. They also adjusted their product portfolios by producing more items with higher added-value and offering better profitability such as flat steel products.
National production of both rebar and wire rod recorded on-year declines in the first half of the year compared with the same period last year, with Mysteel estimating that rebar production in H1 decreased by 8.7% YoY to 90.3 million tonnes, while wire rod output fell by 3.5% to 51.8 million tonnes.
Should the mills adopt the same strategy this half and focus on rolling items offering better returns, supplies of steel longs may tighten, the report points out.
On the other hand, national government policies will further tighten controls on long steel output during July-December, the report adds.
Tighter 'capacity-swap' rules and Beijing's impending crude steel output review are expected to curb disorderly expansion and trim crude steel capacity during this half. On top of the administrative curbs, in the months ahead rising carbon compliance costs will increasingly squeeze the profitability of those long steel production facilities whose carbon emissions are high and efficiency low, the report notes.
But the decline in end-user demand is projected to outpace any dip in long steel output and weigh on the market. During H1, demand from the domestic property sector continued to fall, while exports of long steel items – a crucial outlet for mills and traders when domestic demand falters – also face stronger headwinds from intensifying trade friction.
Moreover, China's long steel exports are expected to face more obstacles this half after major markets for China's steel exports such as the European Union and the UK cut the tax-free quotas on steel imports starting from July 1.
Source:Mysteel Global
