Steel Holds Steady Amid Anticipated Production Cuts

Steel rebar futures traded near CNY 3,040 per ton, holding relatively steady as markets weighed the prospect of production cuts across major steelmaking hubs in China’s Hebei province. Key steel-producing cities, including Tangshan and Handan, have entered the autumn-winter air pollution control period, during which unfavorable weather conditions have periodically disrupted sintering operations and blast furnace utilization. These potential restrictions have added pressure to steel prices, which were already facing seasonal weakness in demand. Over the longer term, 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. The association also expects China's steel consumption to decline by 2% in 2026, as the downturn in the property sector continues to persist longer than previously anticipated.

Steel rebar futures dropped below CNY 3,040 per ton, retreating from one-week highs as environmental restrictions forced production curbs across northern China. Authorities in major steelmaking centers, including Tangshan and Handan in Hebei province, introduced emergency response measures effective Monday in anticipation of severe air pollution. The restrictions added further pressure to metal prices, which were already facing seasonal weakness in demand. Industry data showed that average hot metal production among Chinese steelmakers declined for a fourth consecutive week, falling 0.5% from the previous week to 2.31 million tons as of November 5. Over the longer-term, the World Steel Association now expects global steel demand to contract by 0.1% this year, reversing its earlier forecast of 0.3% growth. The report also projected that China's steel consumption would decline by 2% in 2026 as the downturn in the property sector continues to persist longer than initially anticipated.

Steel rebar futures climbed to around CNY 3,045 per ton, rebounding from near three-month lows as improving profit margins, driven largely by lower coke costs, strengthened the market outlook. Traders also expected coke prices to decline further in the coming week, easing pressure on steel mills. However, the World Steel Association recently revised its global steel demand forecast downward, now anticipating a 0.1% contraction this year, compared with its earlier projection of 0.3% growth made in April. The report indicated that China's steel consumption is expected to decline by 2% in 2026 as the downturn in the property sector persists longer than previously expected. In contrast, India continues to stand out as the fastest-growing major steel market, with demand projected to expand by 7.9% in 2026 and a further 8% in 2027.