Posted on 04 Sep 2026
Heading into China's autumn demand season for construction steel this month, the market focus will shift from cost support to supply-demand fundamentals, according to Mysteel's latest monthly report on the sector for September.
The first half of this month may see prices for rebars, sections, wire rods and other construction-related items still enjoy some support from costs as they did last month, but upward momentum in prices will face mounting headwinds from mid-month, the report predicts. Moreover, higher output could put pressure on prices despite any recovery in demand.
On August 31, Mysteel assessed the national price of HRB400E 20mm dia rebar, a key sentiment barometer for China's long steel market, at Yuan 3,350/tonne ($499/t), up by Yuan 116/t on month and marking the largest on-month price rise this year.
But the price gain benefitted electric-arc-furnace (EAF) mills more than it did blast furnace (BF) mills. For instance, Mysteel's monthly survey reveals that by end-August, the average loss suffered by domestic BF mills when selling their rebars had worsened to Yuan 119/t, compared with Yuan 98/t at end-July.
In contrast, EAF mills covered in the same Mysteel survey had seen their rebar profit margins surge to Yuan 122/t as of end-August from Yuan 39/t at end-July.
Consequently, this month the mini-mills are likely to lift their production to keep enjoying their margins while the BF mills will likely raise output in hopes that the demand recovery for building longs in autumn will see prices and profits rise in tandem, the report argues.
Moreover, although BF mills are currently incurring losses on sales, few makers have actually idled blast furnaces. Instead, many are switching production between steel longs and flats depending on profitability, the report notes, suggesting that mills should be well positioned to quickly respond to any rebound in construction steel demand. However, this could cause prices to subsequently soften, it warns.
Weekly production of rebar and wire rod dropped throughout August to hit an intra-year low outside the Chinese New Year lull. By end-August, the combined output of both items by the 137 domestic steelmakers under Mysteel's survey totaled 2.48 million tonnes, down significantly by 11% or 307,300 tonnes from end-July.
The low production volume had substantially eased the inventory pressure on steel mills, with the combined volume of rebar and wire rod held by the 137 sampled steelmakers declining by 9.2% or 230,600 tonnes on month to 2.28 million tonnes as of August 27.
On the demand front, milder weather after the heat and occasional heavy rains in July-August should see trading activity in China's construction steel market steadily pick up this month, the report notes.
In addition, Mysteel's chief analyst Wang Jianhua believes that positive signals from China's central government late last month – pointing to a more accommodative monetary policy, accelerating fiscal spending, and faster project approvals and groundbreakings – should bolster long steel demand from the macroeconomic side this month, as Mysteel Global reported.
Spot transactions of construction steel items had already shown signs of recovery during the second half of August, with the tonnage of rebar, wire rod and bar-in-coil traded among the 237 trading houses under Mysteel's tracking averaging 90,683 tonnes/day, up by 6.4% or 5,445 t/d on month.
But the actual long steel consumption had remained subdued as of end-August, reflected in the relatively slow pace of destocking among commercial warehouses, the report cautions.
Specifically, the tonnage of rebar and wire rod accumulated by traders in the 35 Chinese cities under Mysteel's coverage totaled 5.77 million tonnes as of August 27, edging down by only 1.2% or 67,100 tonnes on month.
Source:Mysteel Global
