The Chinese steel market showed slight improvement this week, as the impact of the Chinese New Year festival continued to fade. With factories and construction sites resuming operations, steel demand is accelerating, leading to increased market activity and warehouse outflows of rebar and hot-rolled coil (HRC).
Moreover, market confidence is growing ahead of the Chinese government’s “Two Sessions” meetings in early March, with traders and investors anticipating supportive policies that could further boost demand, resulting in a mix of actual demand recovery and optimistic sentiment keeping steel prices relatively strong.
1.Iron ore spot prices rise by $2/t w-o-w: The benchmark iron ore fines price increased by $2/t w-o-w to $109/t CFR China on 21 February 2025 following positive macroeconomic news and a bullish outlook. Steel mills are resuming operations, but declining margins may reduce demand for high-grade products, potentially leading to price cuts to manage inventory. President Trump hinted at a potential US-China trade deal, which would boost market sentiment.
a) Spot pellet premium falls w-o-w: Spot pellet premium for Fe 65% grade pellet decreased by $0.5/t w-o-w to $15.85/t CFR China on 19 February.
b) Spot lump premium rises w-o-w: Spot lump premium fell by $0.004/t to $0.1540/dmtu on 21 February.
2.Coking coal prices inch down w-o-w: Australian coking coal prices fell marginally $2/t w-o-w. PHCC was assessed at $189/t FoB Australia. Market remained range-bound with players on ‘wait & watch’ mode later in the week after a marginal drop seen in bids this week.
3.Chinese billet prices rise RMB 90/t ($12/t) w-o-w: Billet prices in China’s Tangshan rose by RMB 90/t ($12/t) w-o-w to RMB 3,130/t ($432/t), including 13% VAT, on 21 February 2025 against 14 February. Rise in raw material, finished steel prices amid improvement in demand and declining inventory levels have supported billet prices. However, SHFE rebar futures (May 2025 delivery) remained largely stable at 3,361/t ($464/t) on 21 February against 14 February 2025.
4.Domestic HRC prices rise: Chinese HRC offers inched up by RMB 50/t ($7/t) w-o-w to RMB 3,400/t ($467/t) from RMB 3,350/t ($462/t) last week, following upward trend in SHFE HRC futures. SHFE HRC futures (May 2025 contract) stood at RMB 3,474/t ($479/t), up by RMB 88/t ($12/t) w-o-w from RMB 3,386/t ($467/t) previous week. Although China’s HRC prices increased following futures market activity, underlying concerns about demand recovery persisted, as end users remained reluctant to buy. Moreover, China’s HRC export offers remained stable w-o-w at around $470/t.
5.Domestic rebar prices increases w-o-w: China’s rebar offers increased by RMB 100/t ($14/t) w-o-w to RMB 3,360/t ($463/t) from RMB 3,260/t ($450/t) a week ago. SHFE rebar futures (May 2025 contract) rose by RMB 98/t ($14/t) w-o-w to RMB 3,366/t ($464/t) compared to RMB 3,268/t ($451/t) last week. China’s rebar prices experienced a slight uptick, supported by futures market gains, as market participants adopt a wait-and-see approach amid economic policy uncertainty.
China’s Shagang Steel has kept prices of its long steel products – rebars, coiled rebars, and wire rods – unchanged for late-Feb’25 sales. Effective prices now stand at:
- Rebars (16-25 mm): RMB 3,500/t ($482/t)
- Coiled rebars (8-10 mm): RMB 3,610/t ($497/t)
- Wire rods (6-10 mm): RMB 3,520/t ($485/t)
Outlook
China’s steel market is experiencing increased confidence and price support fuelled by recovering demand and expected policy stimulus. However, mixed sentiments persist in export markets due to Vietnam’s anti-dumping duties, creating a complex and potentially volatile trade environment.
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