- Crude steel production reached 83.63 mnt in April
- Falling raw material prices deepen bearish market sentiment.
China’s steel prices declined higher in the week ended 22 May 2026, with domestic hot-rolled coil (HRC) and rebar prices recording notable week-on-week (w-o-w) drop. On the raw materials front, prices of iron ore billet also trended downward while domestic coking coal prices stood stable compared with the previous week.
China’s crude steel production reached 83.63 million tonnes (mnt) in April 2026, marking a decline of 2.8% y-o-y, according to data from the National Bureau of Statistics (NBS). Furthermore, crude steel output in January-April 2026 stood at around 331.12 mnt, down 4.1% y-o-y.
Iron ore spot prices drop lower w-o-w: Iron ore fines benchmark prices for Fe 61% declined by $4/dmt w-o-w to $106/dmt CFR China on 22 May’26.
The downturn was primarily driven by persistent pressure in the steel sector. China’s ferrous segment weakened further as optimism surrounding the once-supportive steel export market continued to diminish. At the same time, the arrival of the rainy season in southern China clouded demand prospects, while growing inventories at steel mills exerted additional downward pressure on prices.
a) Spot pellet premium edge down w-o-w: Spot pellet premium for Fe 65% grade pellet decreased by $0.3/t w-o-w to $17.85/t CFR China on 20 May.
b) Spot lump premium rose marginally w-o-w: Spot lump premium edged up by w-o-w to $0.1825/dmtu on 22 May.
China coke market stable; Australian PHCC prices firm on steady steel demand: China’s domestic coke and coking coal market remained stable, supported by firm steel production and balanced supply-demand fundamentals. Coke prices were unchanged across major producing regions, while coking coal prices were mostly steady with minor weakness in select grades amid cautious buying. Coke producers maintained stable operations and low inventories following the third round of price hikes, while strong pig iron output continued to support demand. Market participants are now monitoring negotiations for a fourth round of coke price increases, with the near-term outlook remaining stable to slightly firm.
Australian premium hard coking coal (PHCC) prices strengthened w-o-w as on 22 May 2026, with FOB prices rising by $1/t w-o-w to $241/t, market chatter suggested a 30,000t trade for Australian PHCC at around $269/t CFR India by an eastern India based mill; however, the deal could not be independently confirmed at the time of reporting. Meanwhile, premium hard coking coal indices were heard around $241/t FOB for premium low-volatility (PLV) material. Also BigMint’s PHCC index increased by $2/t w-o-w to $268/t CNF Paradip, India. The upward movement was primarily supported by stable demand from Asian steel mills, firm coke market sentiment in China, and improved procurement activity from Indian buyers amid healthy steel production levels.
Chinese billet prices soften w-o-w amid weaker demand sentiment: Chinese billet prices declined to RMB 3,040/t ($447/t) on 22 May from RMB 3,090/t ($454/t) on 15 May, pressured by sluggish downstream steel demand, weaker flat steel prices, rising inventories, and cautious buying sentiment. Prices remained stable early in the week due to balanced inventories, steady mill margins, and tighter production inspections, but later softened amid expectations of higher steel output and weaker raw material sentiment.
Billet export offers from China were initially heard around $490/t FOB before declining to nearly $476/t FOB by week-end amid softer export sentiment and weaker overseas buying interest.
Domestic HRC prices declined w-o-w: Chinese HRC prices dropped by RMB 60/t ($9/t) w-o-w to around RMB 3,230/t ($475/t) as on 22 May from RMB 3,290/t ($484/t) from the previous week. Moreover, SHFE HRC futures (October 2026 contract), edeged down by RMB 80/t ($12/t) w-o-w to RMB 3,385/t ($498/t) from RMB 3,465/t ($510/t) a week earlier. Meanwhile, China’s HRC export offers stood at around $520/t FOB, Rizhao stable from the previous week.
Domestic HRC prices extended their downward trend this week, with the pace of decline accelerating slightly compared to the previous period. On the demand side, buying activity remained subdued as downstream markets continued to face pressure from a weakening macroeconomic environment. End-user procurement showed limited improvement, while market participants adopted a cautious approach. Speculative buying remained largely absent, further weighing on overall market sentiment.
Rebar prices decrease w-o-w: Rebar prices in China dropped sharply by RMB 200/t ($29/t) w-o-w to around RMB 3,320/t ($489/t) as on 22 May, compared with RMB 3,520/t ($518/t) in the previous week. Moreover, SHFE rebar futures (October 2026 contract), also declined by RMB 78/t ($11/t) w-o-w to RMB 3,171/t ($467/t) as on 22 May from RMB 3,249/t ($478/t) a week earlier.
With the gradual onset of the traditional off-season and widespread rainfall affecting construction activity, market demand weakened and transactions slowed, causing domestic construction steel prices to fluctuate and move lower.
China’s Shagang Steel has kept its long steel prices unchanged for late-May’26 sales. Prices of rebars, coiled rebars, and wire rods are as follows:
- Rebars (16-25 mm): RMB 3,400/t ($500/t)
- Coiled rebars (8-10 mm): RMB 3,530/t ($519/t)
- Wire rods (6-10 mm): RMB 3,440/t ($506/t)
Outlook
China’s domestic steel market is expected to remain under pressure in the coming week as weaker economic indicators and a faster decline in real estate investment continue to weigh on market sentiment and demand expectations. At the same time, the approaching rainy season in southern China is likely to intensify seasonal demand weakness, with downstream buyers maintaining cautious, need-based procurement.
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