Steel extends losses on China output cuts, US tariffs

Steel rebar futures hovered near CNY 3,130 per tonne on Wednesday, a one-month low, after news that China plans to reduce steel production.

In Tangshan, the country’s top steelmaking hub, mills are set to trim sintering output by 30 percent beginning August 25, followed by a 40 percent cut to blast furnace operations from August 31. The measures, though significant, were less severe than earlier market speculation of a full shutdown, limiting the supportive impact on prices.

Additional restrictions are expected to affect logistics, with transport curbs across the Beijing–Tianjin–Hebei industrial belt likely to slow shipments of metals and raw materials. These measures are part of ongoing efforts to curb overcapacity, cut emissions, and ensure air quality, but they also weigh on near-term demand, particularly from construction projects.

International trade tensions added to the downward pressure. The Trump administration expanded its 50 percent tariff on steel and aluminum imports from August 18, extending the scope to hundreds of additional products including semi-finished and processed steel items.

President Trump also indicated that further tariff measures would be unveiled soon, specifically targeting steel products and semiconductor chips, raising the prospect of new disruptions in global trade flows.

Domestic seasonal factors have also played a role. Demand from property and infrastructure construction remains muted as extreme summer weather continues to hamper building activity. Combined with high inventories and weak sentiment in the housing sector, where new home prices have declined for consecutive months, the outlook for rebar demand remains fragile.

Looking ahead, the market will be watching closely how strictly Tangshan’s production cuts are enforced, as well as whether other steel-producing regions follow suit. Stronger curbs could help ease supply pressures, but without a rebound in downstream demand or policy-driven stimulus, any upward momentum in rebar prices may prove short-lived.