- HRC prices decline but rebars, billets stayed firm
- Iron ore tags drop, coking coal remains stable
China’s steel market displayed mixed trends this week. Notably, domestic prices of hot-rolled coils (HRC) decreased w-o-w, while rebar and billets stayed firm. However, in the raw materials segment, spot iron ore prices fell but coking coal remained stable against last week.
The China Iron and Steel Association (CISA) has announced that the total steel inventory at key Chinese enterprises was at around 16.35 million tonnes (mnt) in mid-May 2025.
China’s crude steel production in April 2025 stood at 86.02 mnt, largely steady y-o-y, according to data from the National Bureau of Statistics (NBS). Moreover, production decreased by 7% m-o-m from March.
1. Iron ore spot prices fall w-o-w: The benchmark price of iron ore fines (Fe 62%) dropped by $2.15/t w-o-w to $98.95/t CFR China on 23 May as against 16 May. The decline in prices is attributed to mills adjusting their input mix towards mid-to-low grade blends to safeguard margins. High-grade material remains are less favoured at current price levels, in order to keep the margins sustained.
a) Spot pellet premium edge down w-o-w: Spot premium for Fe 65% grade pellet fell slightly by $0.2/t w-o-w to $11.80/t CFR China on 23 May.
b) Spot lump premium held firm: Spot lump premium remained unchanged w-o-w at $0.1560/dmtu on 23 May.
2. Coking coal prices stay firm w-o-w: Australian coking coal prices remained largely stable w-o-w while premium hard coking coal (PHCC) prices held steady at around $191/t FOB. Meanwhile, concerns over the next round of met coke price cuts in China and higher coking coal inventories kept prices under pressure.
3. Chinese billet prices hold steady w-o-w: Chinese billet prices held steady w-o-w amid seasonally slowing demand and absence of fresh policy support. Steel billet prices in Tangshan, China, stood at RMB 2,950/t ($409/t), including 13% VAT, on 23 May, unchanged from 16 May. The market remained range-bound this week, weakening the prior week’s momentum. This was largely driven by declining raw material costs, stable finished steel prices, and an imbalanced demand-supply dynamic as mills prioritised margin protection. Additionally, SHFE rebar futures dropped RMB 36/t ($5/t) w-o-w, closing at RMB 3,046/t ($423/t).
4. Domestic HRC prices drop w-o-w: Chinese HRC offers dropped marginally by RMB 10/t ($1/t) to RMB 3,170/t ($441/t) from RMB 3,180/t ($443/t) a week ago, following the downtrend in SHFE futures. SHFE HRC futures decreased by RMB 37/t ($5/t) w-o-w to RMB 3,203/t ($446/t) against RMB 3,240/t ($451/t). This downtrend stemmed from the approaching low-demand season and increased pressure from export tariffs. Moreover, China’s HRC export offers dropped by $3/t w-o-w to 455/t against $458/t a week ago.
5. Domestic rebar prices firm w-o-w: China’s rebar held steady w-o-w at RMB 3,240/t ($451/t). SHFE rebar futures (October 2025 contract) stood at RMB 3,055/t ($425/t) on 23 May, down by RMB 63/t ($9/t) from 3,118/t ($434/t) as of 16 May. Moreover, bad weather slowed outdoor construction and truck deliveries, cutting down rebar demand from end-users.
China’s Shagang Steel rolled over long steel product prices for late-May sales. Prices of rebars, coiled rebars, and wire rods were as follows:
- Rebars (16-25 mm):RMB 3,300/t ($460/t)
- Coiled rebars (8-10 mm):RMB 3,410/t ($475/t)
- Wire rods (6-10 mm):RMB 3,320/t ($462/t)
Outlook
Chinese steel prices will probably stay mostly stable in the near term, facing slight downward pressure. This is because weak demand and ample supply of raw materials are preventing any significant recovery.
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