Steel rebar maintains decline from seven-month high

Steel futures in China declined to CNY 3,210 per tonne from the seven-month high of CNY 3,345 reached on July 29th, as investors reassessed the scale and immediacy of Beijing’s fiscal and monetary support amid persistent weakness in household consumption and the deepening property sector downturn.

While Chinese authorities reiterated plans to pursue an expansionary policy stance to bolster spending and investment, they stopped short of signaling any large-scale, front-loaded stimulus package, tempering earlier market optimism.

Even so, the market’s broader trend remained supported by expectations of tighter supply and continued infrastructure-driven demand, leaving steel futures up around 4% in the third quarter compared with the previous quarter.

Policymakers have pledged to accelerate efforts to eliminate chronic overcapacity in construction materials, with Baosteel — the country’s largest listed steelmaker — projecting domestic crude steel output could shrink by more than 50 million tonnes in 2025 under stricter production controls.

On the demand side, consumption showed resilience in the near term. Chinese blast furnaces imported over 100 million tonnes of iron ore in July, marking a 1.8% year-on-year increase, while steel exports surged 11.4% in the first seven months of the year — the fastest pace for the period since records began — despite facing a wave of new protectionist measures in overseas markets.

This combination of firm export performance, steady raw material inflows, and supply-side discipline has helped cushion prices from sharper declines, even as uncertainty over the depth of domestic stimulus continues to cloud the longer-term outlook.