Steel rebar futures declined to CNY 3,250 per tonne in December, marking a one-month low, as concerns about Chinese ferrous metal demand persisted.
Steel drops to one-month low
While China increased its budget deficit to 4% for the upcoming year to enable “more proactive” fiscal stimulus measures, Beijing has yet to provide specifics on how the stimulus will be implemented. This has reinforced market skepticism, with perceptions that the focus is more on signaling intent than delivering substantive action. As a result, uncertainty lingers over whether investments will address the solvency of heavily indebted Chinese property developers—major global consumers of steel rebar—or curb construction activity to address housing oversupply.
Eyes on yuan devaluation moves
Additionally, speculation about yuan devaluation has weakened the competitiveness of foreign steel relative to Chinese exports. Meanwhile, Chinese steel exports surpassed 100 million tons in the year through November, the highest level since 2016, as domestic mills increasingly rely on international markets to achieve sales targets.
