Steel Rebounds as Global Output Stabilizes

Steel rebar futures climbed above CNY 3,200 per ton, recovering from three-week lows as global steel production declined in April at a slower pace than in March, with the contraction in China’s steel output also easing. The data helped support market sentiment, though broader demand conditions remained mixed. Steel margins in China continue to face pressure amid persistent weakness in the country’s infrastructure and property construction sectors. Demand for Chinese steel exports has also softened, with overseas buyers showing limited willingness to purchase at elevated prices. Meanwhile, Mysteel’s latest monthly industry report indicated that long steel production is expected to rise as improved profitability encourages domestic steelmakers to increase output. However, the prospect of higher supply could add fresh downward pressure later this month if end-user demand continues to weaken.

Steel rebar futures fell to around CNY 3,170 per ton, hovering near their lowest levels in three weeks as signs of slowing economic activity in top consumer China weighed on the outlook for steel demand. Data released earlier this week showed that China’s retail sales and industrial production both missed expectations, while fixed asset investment unexpectedly contracted amid the impact of the global energy crisis on businesses and consumers worldwide. Domestic steel consumption in China also remained under pressure from sluggish construction activity, while demand for Chinese steel exports weakened as overseas buyers showed limited appetite for purchases at elevated prices. Meanwhile, Mysteel’s latest monthly industry report indicated that long steel output is likely to increase as improved profit margins encourage domestic steelmakers to ramp up production, potentially creating additional downward pressure later this month as end-user demand softens.

Steel rebar futures fell below 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.