Steel Declines to Near Three-Month Low

Steel rebar futures fell toward CNY 3,000 per ton, hitting near three-month lows as weak profit margins, sluggish downstream demand and elevated inventory levels continued to pressure the market. Environmental restrictions across several northern Chinese provinces also weighed on hot metal production, although output is expected to rebound once the restrictions are lifted. Meanwhile, the World Steel Association recently downgraded its global steel demand outlook, projecting a 0.1% contraction this year, reversing its earlier forecast of 0.3% growth made in April. According to the report, Chinese steel consumption is expected to fall by 2% this year as the property sector downturn proves more prolonged than previously anticipated. In contrast, India remains the fastest-growing major steel market, with demand forecast to increase by 7.9% in 2026 and 8% in 2027.

Steel rebar futures held below CNY 3,030 per ton, hovering at two-month lows after the World Steel Association revised its outlook, projecting global steel demand to contract by 0.1% this year, compared with its previous forecast of 0.3% growth in April. The industry group cited weakening demand in China and disruptions caused by the Middle East conflict, noting that the anticipated recovery has been slower and more gradual than initially expected. It also lowered its 2027 demand growth forecast to 1.7% from 2.2%. According to the report, steel demand in China is expected to decline by 2% this year as the property downturn persists longer than previously anticipated. Europe’s outlook has also weakened, with the construction recovery proving slower and more uneven. Meanwhile, India remains the fastest-growing major steel market globally, with demand projected to expand by 7.9% in 2026 and 8% in 2027.

Steel rebar futures traded near CNY 3,100 per ton, finding support as falling spot coke prices helped reduce steelmakers’ losses, improving the sector’s outlook and potentially easing pressure to cut production. Meanwhile, China intensified efforts to support its economy amid weak consumption and investment, allocating CNY 550 billion ($82 billion) in unused government debt quotas to strengthen local government finances and expand infrastructure spending. However, the steel industry continued to face subdued demand amid a prolonged property market downturn and sluggish construction activity. Recent data showed that only 6.9% of Chinese steelmakers were profitable at the end of September, highlighting persistent challenges across the sector. Steel producers remain under pressure to curb output as shrinking profit margins and uncertain demand continue to weigh on prices.