- Steel inventories, crude steel output decline
- Domestic rebar prices edge up, HRC tags slide
China’s steel market remained largely subdued this week, weighed down by weak end-user demand and sluggish futures. Domestic HRC offers declined in line with futures losses, while export sentiment stayed largely steady amid limited overseas inquiries. Moreover, raw materials displayed mixed trends — iron ore prices softened on rising port inventories and weak mill restocking, whereas coking coal remained supported by tight supply and higher production costs. Overall, market confidence stayed cautious despite mild optimism stemming from ongoing infrastructure activity and policy support expectations.
Steel inventories at CISA-affiliated mills declined by 11.8% m-o-m to 14.63 mnt in late-October 2025, while average daily crude steel output dropped 9.8% from mid-October and 13.2% y-o-y. Finished steel output inched up 0.9% m-o-m, though pig iron production fell 5.8%. The outlook remains cautiously optimistic, supported by falling stocks and production cuts, though demand recovery will be crucial for sustaining momentum.
1. Iron ore spot prices down w-o-w: The benchmark iron ore fines spot prices fell by $5/dmt to $102/dmt CFR China on 7 November pressured by sluggish trading and deteriorating steel market fundamentals. Weaker steel margins, reduced buying appetite from mills, and limited seaborne cargo activity weighed on sentiment, leading to a continued slide in prices.
Iron ore inventories at major Chinese ports were recorded at 138.4 mnt on 6 November, inching up by 2.79 mnt w-o-w from 30 October, as per data published by SteelHome.
a) Spot pellet premiums stable w-o-w: Spot pellet premiums for Fe 65% grade pellet held firm w-o-w at $18.75/t CFR China on 6 November.
b) Spot lump premiums fall w-o-w: Spot lump premiums dropped $0.005/dmtu w-o-w to $0.1220/dmtu on 7 November.
2. Coking coal prices remain stable w-o-w: China’s met coke market strengthened in early November, supported by constrained supply and elevated raw material costs. Production restrictions in Hebei and Shanxi helped stabilise market sentiment, despite subdued steel margins. A fourth round of price increases is anticipated as producers seek to offset rising input costs, following three consecutive hikes already implemented.
Meanwhile, Australian premium hard coking coal (PHCC) prices held steady at $197/t FOB, while BigMint’s PHCC index inched up by $1/t w-o-w to $211/t CNF Paradip as of 7 November 2025, reflecting steady seaborne market fundamentals.
3. Billet prices decline w-o-w: Chinese billet prices declined by RMB 40/t w-o-w to RMB 2,940/t ($413/t).
The steel market faced pressure from weakening construction demand, high raw material inventories, and subdued futures.
Mills trimmed output to manage costs, with occasional speculative buying providing short-term support. Positive cues from fresh infrastructure investments and policy measures offered mild optimism, but overall sentiment remained cautious.
Export offers stayed largely unchanged, with stable demand from the Middle East and Africa.
4. Domestic HRC prices drop w-o-w: China’s domestic HRC offers dropped by RMB 60/t ($8/t) w-o-w to RMB 3,060/t ($430/t) as compared to RMB 3,120/t ($438/t), following the SHFE futures downtrend. SHFE HRC futures (January 2026 contracts) declined by RMB 58/t ($8/t) w-o-w to RMB 3,250/t ($456/t) on 7 November 2025 against RMB 3,308/t ($464/t) on 31 October. This decline in prices can be attributed to seasonally weak demand and persistent sluggishness in the property sector, a major steel consumer that is weakening the overall demand outlook.
China’s HRC export offers rose by $5/t w-o-w to $465/t FOB as compared to $460/t in the previous week.
5. Domestic rebar prices rise marginally: China’s rebar prices stood at RMB 3,140/t ($441/t), representing a marginal rise of RMB 10/t ($1/t) w-o-w against RMB 3,130/t ($439/t) a week ago. However, both end-users and arbitrage traders showed muted demand for rebar after a drop in the futures market. SHFE rebar futures (January 2026 contract) decreased by RMB 48/t ($7/t) w-o-w to RMB 3,061/t ($430/t) on 7 November 2025 from RMB 3,109/t ($437/t) on 31 October.
China’s Shagang Steel rolled over long steel prices for early-November sales. Prices of rebars, coiled rebars and wire rods are as follows:
- Rebars (16-25 mm): RMB 3,450/t ($484/t)
- Coiled rebars (8-10 mm): RMB 3,560/t ($500/t)
- Wire rods (6-10 mm): RMB 3,470/t ($487/t)
Outlook
China’s steel market is expected to remain under pressure in the near term amid weak end-user demand and sluggish futures. HRC prices may face further downside unless construction and manufacturing activity improve. However, export sentiment and coking coal fundamentals could lend limited support, while overall market direction will hinge on demand recovery and policy-driven infrastructure spending.
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