Steel rebar futures fell to below CNY 3,050 per tonne in April, marking their lowest level in seven months and extending a near 5% drop year-to-date. The decline reflects growing market anxiety as the escalating global trade war clouds the outlook for construction and manufacturing demand—two of the most steel-intensive sectors.
Steel drops to seven-month low
Investor sentiment weakened further after China retaliated against U.S. protectionist measures by raising its levy on American goods to 84%, following Washington’s imposition of a cumulative 104% tariff on Chinese imports.
Although the latest round of U.S. tariffs largely excludes steel products and direct steel trade between the two nations accounts for a relatively small portion of global flows, the broader economic implications have fueled fears of a slowdown in industrial activity. As the world’s largest steel consumer, any signs of demand weakness in China—especially in construction and infrastructure—can have an outsized impact on global steel prices. Traders are increasingly worried that sustained economic headwinds on both sides of the Pacific will weigh on ferrous metal demand more broadly.
Rebar markets is somewhat cushioned
Still, rebar markets appear to be somewhat cushioned compared to base metals such as aluminum and copper, where the tariffs had a more immediate and direct impact. This resilience partly stems from ongoing policy support in China. Beijing has ramped up stimulus measures aimed at shoring up domestic consumption and stabilizing the real estate sector, including financial relief for property developers and infrastructure funding initiatives aimed at boosting urban development. These steps are expected to offer some counterbalance to external pressures and could limit downside risks for steel consumption in the second half of the year.
In addition, Chinese authorities have signaled they may enforce stricter capacity controls on domestic steel production, framing the move as both an environmental measure and a strategic response to rising protectionism abroad. Mandated production cuts, particularly in northern provinces with high emission levels, could provide underlying support to steel prices by curbing oversupply risks.
Market participants remain cautious
However, market participants remain cautious. Inventories at Chinese steel mills have reportedly begun to build up, and construction activity has shown only modest signs of recovery following the Lunar New Year lull. With trade tensions unlikely to ease in the near term and global financial conditions tightening, the rebar market may continue to face downward pressure unless a significant pickup in domestic demand materializes or geopolitical risks subside.
