- HRC and rebar prices rise marginally w-o-w
- Raw material prices remain mixed in the week
Steel prices in China showed mixed trends in the week ended 3 January. Domestic hot-rolled coil (HRC) and rebar prices both rose marginally w-o-w, While raw materials prices including met coke and billet declined slightly w-o-w, while iron ore and coking coal prices remained unchanged.
1. Iron ore spot prices held stable w-o-w: Iron ore fines benchmark prices for Fe 61% remain largely stable at $106/dmt CFR China on 02 Jan’26 w-o-w, amid positive macro outlook from policy cues. Prices were supported by improved sentiment, fresh medium-grade fines trades, and limited mill restarts after maintenance. However, weak fundamentals suggest the uptick may be short-lived, with port prices likely to face near-term pressure.
Pellet inventories at major Chinese ports stood at 150.55 mnt on 31 December, increasing by 1.75 mnt w-o-w, as per data published by SteelHome.
a) Spot pellet premium stable w-o-w: Spot pellet premium for Fe 65% grade pellet remained firm at $17.8/t CFR China on 31 December.
b) Spot lump premium rebounds w-o-w: Spot lump premium rose w-o-w by $0.02/t to $0.055/dmtu on 2 January.
2. China’s met coke market faces persistent pressure: China’s domestic coke market faced continued pressure from 29–31 December, with a fourth round of price cuts driven by weak molten iron output and falling coking coal prices. Stable coke production contrasts with sharply compressed margins, raising the risk of output reductions, while weak year-end steel demand and ample inventories keep port-side sentiment subdued.
Australian premium hard coking coal (PHCC) prices held steady w-o-w at $218/t FoB amid thin holiday activity, while Chinese market sentiment remained weak ahead of the anticipated fourth coke price cut. BigMint assessed PHCC at $236/t CNF Paradip on 2 January 2026, down by $2/t w-o-w.
3. Chinese billet prices inch down w-o-w: Chinese billet prices ended the week marginally lower, while SHFE rebar futures posted a modest net gain amid thin holiday trading and persistently weak fundamentals. From 26 Dec to 2 Jan, billet prices slipped by RMB 10/t to RMB 2,930/t ($419/t), reflecting a fragile supply-demand balance, muted export activity, and limited speculative interest. Despite stable raw material costs and controlled mill output, weak spot trade volumes and year-end order pressure continued to weigh on billet values.
In contrast, SHFE rebar futures rose by RMB 25/t over the same period to RMB 3,103/t ($443/t). The upside, however, remained capped by sluggish downstream demand, slow exports, and cautious mill capacity decisions.
Market participation thinned further during the New Year holidays, with partial port closures and subdued liquidity keeping prices largely range-bound. Participants expect clearer direction only after normal trading resumes post-5 January, when demand signals and policy cues become more visible.
4. Domestic HRC prices inch up w-o-w: Domestic HRC prices in China inched up slightly by RMB 20/t ($3/t) w-o-w to RMB 3,070/t ($438/t) on 31 December from RMB 3,050/t ($436/t) on 26 December 2025, following a modest rise in SHFE HRC futures (May 2026 contract), which inched up by RMB 5/t ($1/t) w-o-w to RMB 3,274/t ($468/t) on 31 December from RMB 3,269/t ($467/t) on 26 December. Despite persistent demand-side weakness, market sentiment improved as officials at China’s fiscal meeting signalled a more expansionary stance for 2026, driven by enhanced government spending and bond-financing tools.
However, China’s HRC export offers remained unchanged w-o-w at $465/t FOB on 30 December 2025, as year-end holidays and muted trading activity kept prices largely stable.
5. Rebar prices rise w-o-w: China’s rebar prices edged up by RMB 20/($3/t) w-o-w to RMB 3,130 ($447/t) on 31 December from RMB 3,110 ($444/t) the previous week, following a rise in SHFE futures (May 2026 contract), which inched up by RMB 19/t ($3/t) w-o-w to RMB 3,127/t ($447/t) on 31 December from RMB 3,108/t ($444/t) on 26 December. However, overall demand in the region remained modest due to the year-end holiday slowdown.
Outlook
China’s steel market is expected to remain volatile in the coming week, with policy-driven optimism providing some support, while weak demand fundamentals continue to weigh on prices. Clearer direction is likely to emerge only after post-holiday trading resumes and demand trends become more visible.
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