- Rebar, HRC prices remain stable amid bearish sentiment
- Policy support hopes, firm iron ore, coke boost billet tags
China’s steel market displayed a mixed performance this week. Domestic prices for hot-rolled coil (HRC) and rebar remained unchanged for the week, while raw materials and billet prices saw an increase. Meanwhile, SHFE futures for HRCs and rebars showed divergent trends w-o-w.
The China Iron and Steel Association (CISA) has announced that the total steel inventory at key Chinese enterprises in early September 2025 stood at 15.82 million tonnes (mnt), increasing by 840,000 tonnes (t) or 5.6% as compared to 14.98 mnt in late-August 2025. Moreover, inventories increased by 750,000 t or 5.0% m-o-m from 15.07 mnt in the same period of the previous month. Compared to the same period last year, inventories were up by 850,000 t or 5.7% from 14.97 mnt.
1. Iron ore spot prices edge up w-o-w: Benchmark iron ore fines spot prices inched up by $1/t w-o-w to $107/dmt CFR China on 19 September. The rise followed mills stocking up on medium-grade fines, even as profit margins stayed under pressure. While overall buying interest was cautious, there was notable firmness in demand for early-November cargoes. In Tangshan, many mills continued to adopt medium-to-low grade blending to ensure profitability.
Iron ore inventories at Chinese ports fell by 0.56 mnt w-o-w to 132.07 mnt on 18 September, as per SteelHome data.
a) Spot pellet premiums increase w-o-w: The spot pellet premiums for Fe 65% grade pellets inched up by $0.45/t w-o-w to $19.85/t CFR China on 17 September.
b) Spot lump premiums fall w-o-w: The spot lump premiums inched down w-o-w to $0.1840/dmtu on 19 September.
2. Coking coal prices inch up w-o-w: Australian premium HCC saw a modest increase of $2/t w-o-w, reaching $189/t FOB. Meanwhile, China’s coke market remained largely range-bound after two price cuts of RMB 100-110/t ($14.06-15.47/t) in September. While spot prices stayed soft, stronger steel margins prompted mills to step up procurement. Ahead of the Golden Week holidays, restocking activity, coupled with rising coal costs, provided some support.
3. Billet prices rise by $6/t w-o-w: Billet prices in Tangshan rose RMB 20/t ($6/t) w-o-w to RMB 3,050/t ($427/t), while SHFE January 2026 rebar ended at RMB 3,172/t ($446/t), up RMB 20/t ($6/t) w-o-w but down RMB 21/t ($3/t) from mid-week highs.
Early week, gains were driven by policy support expectations, firm iron ore and coke prices, and domestic rebar demand exceeding 100,000 t/day. Midweek, prices stabilised at around RMB 3,060-3,040/t ($430-428/t) due to high inventories and soft HRC and plate demand, while the 0.25% Fed cut triggered mild reactions. Towards the weekend, rising raw material costs and strong BF margins lifted billets slightly to RMB 3,050/t ($427/t). Export demand remained firm but was constrained by logistical issues.
The market was balanced but cautious, with limited upside amid elevated inventories.
4. Domestic HRC prices remain stable w-o-w: China’s domestic HRC remained stable w-o-w at RMB 3,180/t ($447/t). SHFE HRC futures (January 2026 contract) stood at RMB 3,362/t ($472/t) on 19 September 2025, up by RMB 21/t ($3/t) w-o-w as compared to RMB 3,341/t ($470/t) on 12 September. After an initial rise at the beginning of the week, a subsequent decline in HRC futures contracts triggered bearish sentiment in the spot market.
China’s HRC export offers held steady w-o-w at $480/t. However, volatility in futures prices, uncertainty surrounding the market outlook, and concerns over possible regulatory action on cargoes evading value-added tax (VAT) prompted both traders and overseas buyers to remain cautious.
5. Domestic rebar prices remain stable w-o-w: China’s rebar prices remained stable w-o-w at RMB 3,250/t ($457/t). SHFE rebar futures (January 2026 contract) dropped by RMB 51/t ($35/t) w-o-w to RMB 3,158/t ($444/t) on 19 September from RMB 3,107/t ($437/t) on 12 September. Demand for rebar was weak due to a combination of adverse weather conditions and a pessimistic outlook amid the upcoming Golden Week holiday. With production outpacing consumption, market sentiment turned bearish. Both buyers and sellers adopted a wait-and-watch approach, resulting in muted trading activity.
Outlook
Domestic steel demand remains weak, with rising inventories pressuring prices. HRC demand is relatively stable, with some support expected from pre-holiday restocking, but overall prices are likely to stay range-bound and policy-driven.
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