- CISA steel inventories rise in early-Oct’25
- SHFE HRC, rebar futures decline w-o-w
China’s steel market saw a downturn this week, with weakening market sentiments and sluggish demand. Domestic prices of hot-rolled coils (HRCs) and rebars declined, mirroring the downtrend in SHFE futures. Notably, raw material prices also displayed a downtrend w-o-w, with iron ore tags, coking coal and billet tags falling.
According to the latest data from the China Iron and Steel Association (CISA), total steel inventories at key member mills stood at 15.88 million tonnes (mnt) in early October 2025, marking an increase of 1.21 mnt or 8.2% compared with 14.67 mnt in late September. Inventories were up by 0.06 mnt or 0.6% m-o-m and by 1.15 mnt or 7.8% y-o-y, indicating continued accumulation amid sluggish demand recovery.
1. Iron ore spot prices inch down w-o-w: The benchmark iron ore fines spot prices fell by $2/dmt to $105/dmt CFR China on 17 October, pressured by weak trading activity. Market uncertainty and soft demand further dragged on prices, while high steel inventories and weak mill margins kept sentiment subdued. Spot trading also slowed sharply as mills avoided new purchases following disappointing finished steel data.
Iron ore inventories at major Chinese ports recorded at 133.4 mnt on 16 Oct, increasing 0.75 mnt w-o-w as per data published by SteelHome.
a) Spot pellet premium falls w-o-w: Spot pellet premiums for Fe 65% grade pellets dipped by $0.95/t to $18.25/t CFR China on 15 October.
b) Spot lump premium edges down w-o-w: Spot lump premiums fell by $0.01/dmtu to $0.1365/dmtu on 17 October.
2. Coking coal prices inch down w-o-w: Australian premium HCC prices inched down w-o-w to $189/t FOB, reflecting weaker demand from Chinese steel mills and ample domestic inventories. China’s metallurgical coke market remained largely balanced, as tightened supplies were countered by subdued steel demand.
BigMint’s premium hard coking coal (PHCC) index was assessed at $206/t CNF Paradip, India, on 17 October 2025, up by $1/t against the previous assessment on 10 October. The market remained active with decent trade activities seen this week.
3. Billet prices fall w-o-w: China’s domestic steel market remained weak this week, with limited demand and sluggish exports keeping prices under pressure. Tangshan billet prices dropped by RMB 40/t ($6/t) w-o-w to RMB 2,930/t ($411/t), while SHFE January 2026 rebar fell RMB 66/t ($10/t) to RMB 3,037/t ($426/t).
High inventories and slow post-holiday recovery weighed on sentiment, prompting mills to reduce output and offer small discounts of $3-5/t to attract buyers. Port congestion further slowed export movement, while rising coke costs and steady iron ore squeezed mill margins.
Prices are expected to fluctuate within RMB 40-50/t next week as mills await policy cues and seasonal demand support.
4. Domestic HRC prices drop w-o-w: China’s domestic HRC offers fell by RMB 100/t ($14/t) w-o-w to RMB 3,060/t ($429/t) as compared to RMB 3,160/t ($443/t) a week ago, following a drop in SHFE futures. SHFE HRC futures (January 2026 contract) declined by RMB 71/t ($10/t) w-o-w to RMB 3,219/t ($452/t) on 17 October from RMB 3,290/t ($462/t) on 10 October 2025.
Additionally, China’s HRC export offers decreased by $5/t w-o-w to $465/t FOB against $470/t a week ago. The HRC market was quiet due to weak sentiment, driven by falling Shanghai futures and an uncertain outlook, which kept buyers on the sidelines.
5. Domestic rebar prices decline w-o-w: China’s rebar prices were at RMB 3,090/t ($434/t), down by RMB 80/t ($11/t) w-o-w from RMB 3,170/t ($445/t), following a downtrend in SHFE futures. SHFE rebar futures (January 2026 contract) declined by RMB 61/t ($9/t) w-o-w to RMB 3,046/t ($427/t) on 17 October as of RMB 3,107/t ($436/t) on 10 October 2025.
This decline is attributed to weak end-user demand and rising inventories, which kept rebar prices under pressure.
China’s Shagang Steel has kept its rebar prices stable for mid-October sales, as per sources. Prices of rebars, coiled rebars, and wire rods were as follows:
- Rebars (16-25 mm): RMB 3,450/t ($483/t)
- Coiled rebars (8-10 mm): RMB 3,560/t ($499/t)
- Wire rods (6-10 mm): RMB 3,470/t ($486/t)
Outlook
China’s steel market is likely to stay under pressure in the near term, driven by sluggish domestic demand, elevated inventories, and weak sentiment in both spot and futures markets. Unless downstream demand improves, market sentiment will likely remain cautious.
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