Steel Holds Near 1-Month High

Steel rebar futures held above CNY 3,060 per ton, hovering near one-month highs on hopes for stronger demand in top consumer China ahead of the September peak construction season, while Beijing unveiled fresh policy support. Markets are anticipating a pickup in demand as construction activity accelerates ahead of winter. China will also introduce a new package of measures to expand domestic demand and support economic growth, according to Vice Finance Minister Liao Min. Additionally, China’s National Development and Reform Commission reportedly held consecutive meetings last week urging local governments to accelerate the construction of major projects. However, 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.

Steel rebar futures fell to around CNY 3,070, retreating from multi-week highs to four-week lows as weak construction activity and elevated rebar inventories continued to weigh on sentiment. China’s property market remained under pressure, with new home prices falling year-on-year in July, while rebar stockpiles stayed above year-ago levels. Weak mill profitability also limited buying appetite, with only about one-third of steelmakers profitable at the end of July. However, improving blast-furnace operating rates and expectations of seasonal restocking ahead of the September peak construction season offered some support. Beijing also signalled further measures to boost domestic demand, while the NDRC urged local governments to accelerate major projects, raising hopes for a gradual improvement in steel consumption.

Steel rebar futures rose toward CNY 3,040 per ton, hitting three-week highs as investors look forward to a high-level meeting in Beijing next week where authorities could signal fresh policy support. However, 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.