Steel Falls as EU Tightens Trade Measures

Steel rebar futures climbed above CNY 3,250 per ton, reaching 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.

Steel rebar futures rose toward CNY 3,200 per ton, reaching their highest levels since August last year, supported by strong seasonal demand and ongoing restocking from end users. Chinese steelmakers have also raised domestic delivery prices across products, reflecting higher input costs linked to the Middle East conflict. Sentiment was further underpinned by projections from the World Steel Association, which expects global steel demand to increase 0.3% this year to 1.724 billion tons and rise 2.2% in the following year to 1.762 billion tons, signaling a gradual recovery in the sector. In addition, worldsteel reported that global crude steel production fell 4.2% to 159.9 million tons in March, with declines recorded across Asia and Oceania, the EU, the Middle East, Russia and other CIS + Ukraine, and South America. There will be no commodities trading in China until May 5 for the Labor Day holiday.