Steel rebar futures rebounded to CNY 3,250 per tonne on March 13th, recovering from the one-month low of CNY 3,209 reached on March 11th, as markets reassessed the potential impact of Chinese policies on ferrous metal output and demand for the rest of the year.
Steel rebounds from one-month low
This recovery followed the conclusion of the annual Two Sessions in Beijing, where officials signaled that steel producers will face mandatory capacity cuts to address the downside risks to demand, which stem from both trade barriers and a slowdown in domestic construction activity.
Trade barriers imposed by countries like South Korea, Vietnam, Taiwan, and Brazil—stemming from concerns about potential dumping by Chinese steel giants—have placed additional pressure on the market. These trade restrictions, combined with the ongoing spillover effects from US tariffs on Canadian steel, have contributed to uncertainty over global steel trade dynamics. However, the outlook was somewhat supported by the Chinese government's efforts to stabilize the sector. The government outlined plans to reduce oversupply in the property market, a key driver of steel demand in China, by issuing special bonds aimed at purchasing land and property inventory from debt-ridden companies like Vanke. These efforts reassured investors that state-backed construction firms would not face liquidation, which helped restore some confidence in the steel market.
Chinese moves offer optimism
As a result, while challenges remain due to external trade restrictions and domestic economic slowdowns, these policy measures from Beijing have provided a level of optimism that steel demand may stabilize in the near term. Investors are closely monitoring further government actions to gauge how effectively they can manage the pressures on the steel sector.
