Steel Rises to November High

Steel rebar futures fell toward CNY 3,200 per ton, pulling back from nine-month highs as expectations of a seasonal slowdown in demand and softer downstream consumption weighed on the market. Mysteel’s latest monthly industry report indicated that construction steel prices in China are likely to face pressure this month due to weakening supply-demand fundamentals. The report also noted that long steel output is expected to increase as improving profit margins encourage domestic steelmakers to raise production, potentially adding downward pressure later in the month as end-user demand weakens, particularly in southern China during the wet season. Still, stronger-than-expected economic data from China provided some support to sentiment, with exports surging to a record high in April as companies accelerated stockpiling of components amid concerns that the Iran conflict could further raise input costs.

Steel rebar futures climbed toward CNY 3,250 per ton, approaching their highest level since July last year as expectations for stronger demand supported the market. Steel production in China remained stable, while improved profit margins at mills encouraged firmer output and boosted sentiment across the sector. Stronger-than-expected economic data from China also underpinned prices, with exports surging to a record high in April as companies accelerated stockpiling of components from the manufacturing hub amid concerns that the Iran conflict could drive input costs even higher. In addition, China’s consumer inflation exceeded forecasts, while producer prices recorded their strongest increase in nearly four years, pointing to a continued recovery from the deflationary pressures that weighed on the economy in recent months. Still, analysts warned that the approaching seasonal slowdown in steel demand and softer downstream consumption could cap further upside in steel prices.

Steel rebar futures surged to around CNY 3,250 per ton, hitting their strongest level since August last year, supported by robust buying in mainland China as trading resumed after the May Day holiday. Market sentiment was reinforced by a continued drawdown in steel inventories, which have now fallen for seven consecutive weeks, pointing to tightening near-term supply conditions in the physical market. On the macro side, China’s manufacturing PMI remained in expansion territory, while policymakers in Beijing continued efforts to stabilize the real estate sector, supporting the outlook for metals demand. Sentiment was further underpinned by projections from the World Steel Association, which expects global steel demand to rise 0.3% this year to 1.724 billion tons and accelerate 2.2% next year to 1.762 billion tons, signaling a gradual recovery in the industry.