Steel rebar futures hovered around CNY 3,070 per tonne in April, marking a decline of over 7% since the start of the year, as mounting trade tensions between China and the United States clouded the outlook for construction and manufacturing activity in the world’s largest consumer of ferrous metals.
Steel maintains decline on trade worries
The recent escalation saw the US sharply raise tariffs on Chinese imports to 125% in retaliation for Beijing’s 84% duties on American goods, deepening fears of a protracted economic standoff. Although steel was partially exempt from the latest US tariff hikes, and direct steel trade between the two nations represents only a minor share of global volumes, the broader macroeconomic implications have dampened sentiment across commodity markets.
The uncertainty surrounding bilateral trade relations has led to growing concerns about slower infrastructure spending, weaker industrial output, and delayed real estate development in China — all critical demand pillars for steel rebar. Market participants are increasingly wary that continued friction with Washington could weigh on investment decisions and slow the recovery in construction activity, even as domestic policy support remains in place.
Steel less hit by the trade war
That said, the negative impact of the trade dispute on the steel sector has been somewhat less pronounced than in other metals markets, such as aluminum or copper, owing to targeted economic support from Beijing. The central government has stepped up stimulus aimed at bolstering household consumption and easing financing conditions for property developers — a move designed to stabilize demand for steel-intensive construction projects and prevent a deeper downturn in the housing market. These measures are expected to soften the blow of external headwinds and sustain baseline demand for rebar.
In addition, Chinese authorities have signaled their intent to impose fresh capacity restrictions on domestic steel mills, in response to rising protectionist trade actions by other countries, including Vietnam, South Korea, and Brazil. These planned cuts are part of Beijing’s broader effort to curb emissions, reduce oversupply, and shield its steelmakers from foreign dumping investigations and retaliatory tariffs. If implemented effectively, the capacity reductions could help tighten domestic supply and lend some support to prices in the medium term, even as external pressures persist.
