Steel Drops to 4-Week Low

Steel rebar futures slipped below CNY 3,090 per ton, reaching their lowest level in four weeks as Chinese markets reopened following a week-long holiday, with the industry continuing to grapple with deteriorating steel margins. Industry data showed that only 6.9% of Chinese steelmakers were profitable by the end of September, while average daily hot metal production declined to a six-month low of 2.34 million tons. Reports also indicated that some Chinese steelmakers had begun or were planning equipment maintenance as mounting losses continued to pressure operations. In addition, China’s steel industry faced persistently weak demand amid a prolonged property downturn and subdued construction activity. Meanwhile, data from the World Steel Association showed that global crude steel production declined 1.2% year-on-year to 144.2 million tons in August.

Steel rebar futures climbed to around CNY 3,109 per ton, reaching a one-week high after World Steel Association data showed global crude steel production fell 1.2% year-on-year to 144.2 million tons in August. On a monthly basis, global crude steel output also declined 3.3% from the 149.2 million tons produced in July, with China’s 2.3 million-ton month-on-month drop accounting for nearly half of the global decrease. Still, China remains the world’s largest steel producer, representing 51.7% of global output. Meanwhile, the Chinese steel industry continued to face weak demand and deteriorating mill profitability. The prolonged property downturn remained a major drag on rebar consumption, with new construction activity and demand from developers staying subdued. Chinese markets will be closed from October 1 to 7 for the weeklong National Day holiday.

Steel rebar futures in China fell below CNY 3,100 per ton, approaching two-week lows as weak demand continued to pressure the market. The prolonged property downturn remained a major drag on rebar consumption, with new construction and developer demand subdued. Chinese home prices fell 3% year-on-year in August, while existing homes accounted for most residential sales this year, reflecting efforts to reduce unsold properties and limiting the need for new construction. Meanwhile, profitability at Chinese steel mills deteriorated again last week, while average daily hot metal production declined, pointing to mounting pressure on producers. The China Iron and Steel Association urged mills to curb production and reduce inventories to protect margins and address excess supply. Data from the World Steel Association showed global crude steel production fell 1.2% year-on-year to 144.2 million tons in August.