China Steel Market Weekly: Falling Inventories Support Long Products As HRC Prices Ease

PROMISTEEL  |  STEEL INDUSTRY NEWS

Published: September 29, 2026  |  Market data through September 25, 2026

Contents

1. Weekly Market Snapshot
2. What Changed in China Steel Prices?
3. Falling Inventories
4. Mill Operations and Profitability
5. Raw Materials
6. Freight and Energy Risks
7. Trade Policy
8. China Macro Data
9. Buyer Actions
10. Near-Term Outlook
11. Frequently Asked Questions
12. Data Sources and Methodology

Weekly Market Snapshot

What Changed in China Steel Prices?

The national steel price index closed at RMB 3,463 per tonne, only RMB 1 lower week on week. The headline number hides a clear product divergence. Long products rose 0.21%, while flat products fell 0.25%. Rebar averaged RMB 3,323 per tonne, up 0.30%, whereas the average hot-rolled coil price declined by RMB 17 to RMB 3,318 per tonne.

The January 2027 rebar futures contract closed at RMB 3,118 per tonne on September 24, up 0.71% for the week. The futures gain indicates improved short-term sentiment, but the contract still traded below the physical-market average. Buyers should therefore separate futures momentum from actual mill offers, grade premiums, processing charges and export logistics.

For overseas procurement, the split suggests firmer bargaining conditions for rebars and other long products, while flat-steel buyers may have more room to compare mills and shipment windows. The market is not showing a broad-based price rally.

Long products and rebar strengthened while flat products and hot-rolled coil moved lower.

Falling Inventories Improve the Near-Term Balance

Combined output of the five major steel products fell to 7.7968 million tonnes, down 144,600 tonnes. Total inventory dropped by 557,600 tonnes to 14.8197 million tonnes, a weekly decline of 3.6%. Apparent consumption reached 8.3544 million tonnes, with construction-steel consumption rising 8.1% and sheet consumption increasing 0.4%.

Rebar showed the clearest tightening signal. Weekly production fell by 87,200 tonnes to 1.6535 million tonnes, the lowest level in nearly four years. Rebar inventory declined 6.84% to 5.9207 million tonnes, while apparent demand rose 10.15% to 2.0885 million tonnes.

This combination supports rebar prices in the short term, although it does not guarantee a sustained rally. Overseas buyers comparing China rebar supply options should monitor whether post-holiday demand remains strong and whether mills restore output after inventories normalize.

Five-product supply and inventory declined while rebar demand increased.

Steel Mill Operations and Profitability

Among 247 surveyed blast-furnace mills, the operating rate slipped 0.31 percentage point to 82.01%, capacity utilization fell 0.74 point to 88.49%, and daily hot-metal output decreased by 19,700 tonnes to 2.3566 million tonnes. Only 6.93% of mills were profitable, down another 0.86 percentage point.

Electric-arc-furnace activity moved in the opposite direction. Capacity utilization at 94 independent EAF mills rose 0.95 point to 57.8%. Average profit remained negative at RMB 78 per tonne, although production during off-peak electricity hours generated an average profit of RMB 21 per tonne.

The mixed operating picture limits aggressive supply expansion. Blast-furnace mills face margin pressure, while EAF mills remain sensitive to power costs and scrap prices. That gives the market some supply discipline, but it also increases the risk of sudden production adjustments when margins or electricity economics change.

Raw Materials Send Conflicting Signals

Coke remains costly while coking coal demand is weak

Portside quasi-grade-one coke rose RMB 10 to RMB 1,930 per tonne. Five rounds of coke increases since mid-August had added RMB 450 per tonne for wet-quenched material, while the first proposed price reduction had not yet been implemented. At the same time, coking-coal auction failures in Shanxi reached 93.1%, indicating weak acceptance of current coal offers.

The contrast means coke costs remain embedded in mill calculations even as upstream coking-coal sentiment weakens. Coke inventories at 18 ports fell by 135,100 tonnes to 2.3917 million tonnes, while coking-coal stocks at 16 ports edged down by 9,000 tonnes to 7.0697 million tonnes.

Iron ore inventories continue to rise

Iron ore inventories at 47 Chinese ports increased by 805,700 tonnes to 172.165 million tonnes. Average daily port discharge fell to 3.5055 million tonnes, whilevessels waiting at port fell to 118. Steel-mill imported ore stocks rose by 2.3194 million tonnes to 95.6331 million tonnes, equivalent to 33.09 days of consumption.

Higher ore availability and lower daily consumption can restrain raw-material upside, but coke and energy remain counterweights. The result is a cost base that is easing unevenly rather than falling across all inputs.

Freight and Energy Risks Matter More for Export Offers

The Baltic Dry Index rose 1.66% to 3,426. Panamax recorded the strongest weekly increase at 6.93%, while Capesize rose 0.28% and Supramax gained 1.08%. For bulk steel shipments, stronger dry-bulk indices can offset part of any domestic steel-price advantage.

Container freight was more stable. The Shanghai Containerized Freight Index slipped 0.03% to 3,686.62, ending eight consecutive weekly gains. The Europe route fell 4.6% to USD 2,313 per TEU, and the US West Coast route declined 1.3% to USD 7,463 per FEU, while the China Containerized Freight Index rose 1.08% to 1,917.68.

Energy and security risks remain the larger uncertainty. Transit through the Strait of Hormuz was severely disrupted during the week, Brent crude ended at USD 104.32 per barrel, and attacks around Yanbu increased concern over alternative Red Sea export infrastructure. Iran also proposed a seven-day framework for reopening the strait, but negotiations had not produced a durable agreement at the time of publication.

For steel buyers, this creates exposure beyond the FOB mill price: bunker surcharges, vessel availability, insurance, transshipment routes and quote-validity periods may change quickly. Contract terms should identify which party carries extraordinary freight or security-related surcharges.

Trade Policy Becomes a Product-Level Procurement Risk

Trade remedies are becoming more product-specific. Buyers should verify customs classification, country of origin, producer identity, entry date, and deposit exposure before confirming a landed-cost comparison.

The U.S. tin mill case is especially relevant to buyers of SPTE tinplate and related tin-coated steel. A domestic China price quote is not a landed-cost answer when potential cash deposits exceed the product value.

Likewise, buyers of H-beams and electrical steel should confirm whether a quotation remains valid under the destination market's current trade-remedy rules.

China Macro Data Still Caps the Upside

China produced 74.61 million tonnes of crude steel in August, down 3.7% year on year, while steel exports rose 6.8% to 10.155 million tonnes. Strong exports continue to absorb domestic supply, but overseas trade measures are narrowing access for certain product-market combinations.

Domestic demand indicators remained weak. Fixed-asset investment for January through August declined 7.2%, and real-estate development investment fell 19.9%. The People's Bank of China reiterated a moderately loose policy stance and stronger counter-cyclical adjustment at its September 24 quarterly meeting; open-market operations delivered a net RMB 787.5 billion during the week. August CPI rose 0.8% and PPI increased 3.8% year on year.

Policy support may stabilize expectations, but weak property investment continues to constrain a broad demand recovery. Infrastructure, manufacturing and exports therefore remain more important than housing for the near-term steel balance.

What Overseas Steel Buyers Should Do Now

Promisteel can support buyers by comparing grades, mills, processing routes and logistics options across its steel product portfolio. A useful inquiry should include the product standard, grade, dimensions, quantity, destination port, required delivery window, end use and any destination-market compliance restrictions.

Near-Term Outlook

The next one to two weeks are likely to remain product-specific rather than directional for the whole steel market. Lower inventories and reduced rebar output support long products, while weaker flat-steel prices and rising iron ore availability limit a broad cost-driven rebound. Mill losses may restrain supply, but weak property demand caps the upside.

For exporters and overseas buyers, freight and trade policy may move the landed price more than the domestic index. The practical approach is to lock specifications first, compare complete delivered-cost components, and keep quotation validity aligned with volatile freight and regulatory conditions.

Frequently Asked Questions

Data Sources and Methodology

Market indicators in this weekly briefing cover the week ending September 25, 2026 unless otherwise stated. Price, production, inventory, mill-operation and port-stock figures are based on Mysteel and market-survey data. Macro indicators refer to published China statistics and central-bank communications. Shipping indices refer to Baltic Exchange and Shanghai Shipping Exchange data.

Trade-policy information should be checked against the final legal notice before shipment. The US tin mill products preliminary determination was verified against the US Department of Commerce announcement dated September 17, 2026. The EU GOES safeguard announcement was verified against the European Commission notice dated September 18, 2026. Market data can change after publication and does not constitute a price guarantee or customs advice.

Official references: US Department of Commerce - Tin Mill Products from China |