Posted on 24 Sep 2026
Steel demand from end users has yet to show any significant recovery so far this month, leaving China's steel prices still under pressure, according to the latest monthly report of the China Iron & Steel Association (CISA).
Although September is considered a peak month for steel consumption in China, actual demand from end users has failed to meet market expectations, the association pointed out. This is capping any further rise in domestic steel prices, despite the firm cost support with the high prices of coking coal and coke.
For the real estate sector, investment has declined at a faster pace, and the floor area of newly-launched projects continues to shrink. Although policies such as "urban renewal" have been rolled out, there is a time lag between policy deployment and actual implementation, which means the pace at which infrastructure will boost steel demand remains uncertain.
If end-user demand fails to pick up effectively in September and October, the cost-driven rally will be hard to sustain, and steel prices may soften, CISA warned.
For the time being, China's steel industry is caught between high costs and weak demand. Coking coal and coke prices have remained firm, putting significant cost pressure on domestic steelmakers, while demand this month has yet to pick up, leaving steel prices with little upward momentum.
Quite a few Chinese steel mills have already begun recording losses, yet their production cuts remain limited, CISA noted.
China's crude steel output recovered slightly in early September, with the daily production among CISA's member steel mills averaging 1.92 million tonnes/day over September 1-10, increasing by 2% from late August, according to the report.
On the other hand, inventories 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 also increased in early September to 16.52 million tonnes, higher by 1.7% compared with the end of August.
As of September 10, stocks of the five major steel items at traders' warehouses across the 21 Chinese cities under CISA's regular tracking came in at 9.59 million tonnes, dipping by 1.2% from ten days earlier, though it was still 4.2% higher compared with one year ago.
As for the global market, the global economy has shown greater-than-expected resilience amid the energy shock triggered by the conflict in the Middle East, while underlying worries persist. For the steel industry, this means overseas demand may wane, according to the report.
However, the association is not overly pessimistic about steel demand in the medium- to long-term, as domestic policies to stabilize growth have recently been stepped up, and additional policy measures can be expected.
In parallel, on the supply side, the combined tightening of carbon emission constraints and capacity regulation policies has strengthened market expectations of a supply-side contraction in the steel industry, the report showed.
CISA urged companies to take a rational approach to market fluctuations, avoid disorderly low-price competition, and work together to maintain a fair and orderly market environment.
Source:Mysteel Global
