Posted on 27 Aug 2026
China's steel prices are expected to stay rangebound in the near term, as expectations for a seasonal demand recovery in autumn and cost-side support may provide upward impetus, according to the latest monthly report of the China Iron & Steel Association (CISA). On the other hand, persistently high inventories may cap any significant upside, it suggests.
Steel demand is likely to see a seasonal improvement in late August, with the sweltering heat subsiding and infrastructure projects ramping up to meet deadlines.
On the macroeconomic front, global trade growth may continue to face headwinds amid the recurring tensions in the Middle East, elevated energy prices, and intensified inflationary pressures, CISA notes. For the domestic market though, additional stimulus policies are expected to take effect during this half of the year, which should continue to underpin steel demand.
However, the actual pace of recovery in steel demand remains to be seen, the association warned. Construction steel demand has weakened considerably, weighed down by the ongoing slide in real estate investment that is unlikely to reverse any time soon.
In parallel, the manufacturing sector is also feeling the strain, especially the automotive industry, where both production and sales posted on-month and on-year declines in July, CISA noted.
Besides, exports will play a smaller role in balancing domestic supply and demand, the association pointed out, and the room to ease domestic supply pressure through exports is shrinking.
On the one hand, the European Union has cut its tariff-free steel import quota to approximately 18.3 million tonnes effective July 1, while imposing a 50% tariff on steel imports exceeding the quota. This, coupled with the full implementation of the Carbon Border Adjustment Mechanism, indicates that access to European markets has become much more difficult.
On the other hand, July saw a slew of trade remedy investigations initiated against various Chinese steel products by several countries including South Korea, South Africa, Vietnam and Japan. China's steel exports declined on month in July, and the downward pressure on exports is unlikely to show substantial improvement in the short term.
Regarding steel supply, China's crude steel output increased in early August, as blast furnaces that were previously idled for maintenance have resumed production.
Over August 1-10, daily crude steel output among CISA's member steel mills averaged 1.97 million tonnes/day, rising by 5.8% compared with late July, according to the report.
As of August 10, stocks of the five major steel items comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by CISA's member mills registered 17.18 million tonnes, up by 5.6% from the end of July.
During the same period, stocks of the five major steel items at traders' warehouses across the 21 Chinese cities under CISA's regular tracking had mounted slightly by 0.6% to reach 9.86 million tonnes.
As the seasonal weakness subsides with the end of summer, some steel mills are expected to resume production, the report observed but warned that an excessively rapid resumption would likely prolong inventory destocking and perpetuate supply-demand imbalances.
CISA called on mills to be cautious, align production with sales, and avoid hasty restarts to prevent further supply-demand mismatches from intensifying margin pressure.
Source:Mysteel Global
