- Weak construction demand keeps buying activity subdued
- Elevated inventories continue to pressure mill margins
China’s Shagang Steel has reduced its long steel prices by RMB 50/t ($7/t) for sales during 21-31 August, as weak construction demand and elevated inventories continue to weigh on the domestic market. The producer lowered its rebar (16-25 mm) price to RMB 3,250/t ($483/t), coiled rebar (8-10 mm) to RMB 3,380/t ($503/t), and wire rod (6-10 mm) to RMB 3,290/t ($489/t).
The reduction comes as China’s construction-steel market continues to face weak end-user demand, with high temperatures, heavy rainfall and typhoons disrupting construction activity and limiting near-term procurement. Although inventories have eased recently, stock levels still remain elevated, keeping pressure on mills and limiting scope for price increases.
Chinese mills have responded by reducing production and advancing maintenance amid weak demand and compressed margins. However, these supply adjustments have not yet resulted in a sustained tightening of the market, with construction-steel demand still under pressure. Shagang’s latest RMB 50/t reduction therefore reflects continued pressure on mills to align offers with prevailing market conditions and support sales in the latter part of August.
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