Steel Falls on Demand Concerns

Steel rebar futures fell toward CNY 3,010 per ton, retreating from three-week highs as signs of persistently weak demand in top consumer China weighed on the market. Chinese steelmakers continued to struggle with deteriorating margins and a prolonged property sector downturn, limiting demand for steel products. Industry data showed that China’s daily crude steel output fell 11% in July from the previous month to 2.48 million tons, while daily hot metal production declined 2.2% to 2.2 million tons. China’s property market has remained in a prolonged slump for five years, with real estate values continuing to decline, financially strained households being forced to sell properties, and heavily indebted developers facing mounting pressure after accumulating massive debt on speculative projects. Export opportunities for Chinese steel mills were also constrained by growing protectionist measures from foreign governments.

Steel rebar futures in China rose toward CNY 3,020 per ton, rebounding from the one-year low of CNY 2,085 on August 3rd, tracking support for other ferrous metals amid a momentary dip in iron ore supply to Chinese furnaces. More workers joined BHP's Port Hedland strike in iron ore operations. The suspension in operations on the world's largest iron ore export hub added to threats on Sino-Australian trade amid rifts with China's state-backed commodity buying authority. Still, sluggish demand maintained steel prices down year-to-date. The latest data extended the trend China's property crisis, indicating that demand for rebar will remain week for major sector. The official construction PMI fell to a record low of 47 in July, and construction starts sank by 23.4% in June annually. Export options for mills were also limited due to protectionist policies by foreign governments against ample Chines capacity. Steel and iron product exports from China fell 4.4% in volume in the year to July.

Steel rebar futures fell to around CNY 3,000 per ton in early August, reaching their lowest level since June 2025 as widening losses at Chinese steel mills and a deteriorating industry outlook continued to weigh on sentiment. Industry data showed that average losses at steel mills in Tangshan have surpassed CNY 100 per ton and are expected to keep widening, with the sector likely to remain under pressure this month. China’s prolonged property downturn also continued to curb steel demand, as construction accounts for roughly one-third of the country’s steel consumption and represents the bulk of rebar usage. Meanwhile, investors digested updates from the Politburo meeting in Beijing, where policymakers refrained from introducing major new stimulus measures and instead focused on implementing existing fiscal policies to support the slowing economy. Elsewhere, private data showed China's manufacturing activity slowed to a four-month low in July, further weighing on the demand outlook.