Posted on 12 Oct 2026
China's construction steel market is expected to face mounting pressure this month as steel output rebounds and raw material costs ease, according to Mysteel's latest monthly report on the sector. Resilient seasonal demand may offer some support, however.
Inventories accumulated had moderately over the National Day holiday spanning October 1-7, when most market participants were away and spot trading activities remained subdued. However, demand may pick up before the arrival of colder weather in northern China curbs construction activity in this month's second half, the report noted.
Despite a mild recovery, actual consumption of construction steel remained subdued by the summer heat in September, which weighed on domestic long steel prices. Daily spot trading volumes of rebar, wire rod and bar-in-coil among the 237 trading houses under Mysteel's tracking averaged 93,575 tonnes/day last month, up by 3.2% on month but down by 8.7% on year.
On September 30, Mysteel assessed the national price of HRB400E 20mm rebar, a key indicator of sentiment in China's long steel market, at Yuan 3,330/tonne ($498/t), down Yuan 20/t from the end of August.
For October, infrastructure demand is expected to provide some support for the market, with the faster issuance of special-purpose bonds likely to stimulate steel consumption in the sector, the report noted. However, sluggish real estate activity is expected to remain the main drag on overall demand.
On the supply side, mounting losses among domestic integrated steelmakers had prompted production cuts last month, with China's construction steel output falling to an intra-year low late in September.
Mysteel's monthly survey showed that average margin losses on rebar sales incurred by domestic blast furnace (BF) mills had widened to Yuan 187/t by the end of September, compared with Yuan 129/t at the end of August, as elevated raw material costs continued to squeeze margins.
However, easing supply conditions for iron ore and coke are expected to put further downward pressure on raw material prices this month. Since September 30, major steelmakers in northern China have initiated won two rounds of coke price cuts, persuading independent coke producers to lower their metallurgical coke prices by a combined Yuan 200-220/t, according to market sources.
In the meantime, Mysteel PORTDEX 62% Australian Fines in Qingdao was assessed at Yuan 655/wmt FOT including the 13% VAT on October 9, slumping by Yuan 15/wmt from September 30, while Mysteel SEADEX 62% Australian Fines also declined by $3.2/dmt over the period to sit at $91.6/dmt CFR Qingdao, marking the lowest level in two years.
Lower raw material costs could subsequently improve steelmakers' margins and encourage some mills to raise long steel output, potentially adding to supply pressure this month, the report warned.
After all, production cuts in September had helped to ease inventory pressure. By the end of the month, combined stocks of rebar and wire rod held by the 137 steelmakers under Mysteel's coverage totaled 2.07 million tonnes, down 9.3% or 211,000 tonnes from the end of August.
Over the same period, stocks of the two products held by traders in the 35 cities monitored by Mysteel fell by 18.5% or 1.07 million tonnes on month to 4.71 million tonnes.
While the declines have eased inventory pressure, a recovery in output amid limited demand growth could slow destocking or lead stocks to accumulate again, potentially adding to market pressure in October, the report warns.
Source:Mysteel Global
