China Iron and Steel Association: Steel prices are showing a narrow range of fluctuation.
In April, under the continued pressure of the US tariff war, the downward trend of raw material prices, and the recovery of demand but still below expectations, the domestic steel market prices showed an overall fluctuating downward trend. Entering May, steel demand shifted from peak season to off-season, steel prices showed a narrow range of fluctuating operation.
Analysis of future steel price trends
From the perspective of the macroeconomic situation, the current international situation is becoming increasingly complex. With the uncertainty of the US Trump administration's tariff policy and the increasing rise of international trade protectionism, the uncertainty of international geopolitical conflicts has also further increased, and the global economic recovery in 2025 faces certain challenges. The International Monetary Fund (IMF) released its April World Economic Outlook, pointing out that the effective tariff rate in the United States has soared to exceed the level during the Great Depression, and the countermeasures taken by major trading partners have significantly pushed up global tariff rates. Therefore, the forecast values for global economic growth in the next two years have been lowered to 2.8% and 3%, respectively, a cumulative decrease of about 0.8 percentage points compared to the forecast in January 2025.
Domestically, on April 25, a meeting of the Political Bureau of the CPC Central Committee held that since the beginning of this year, the economy has shown an upward trend, but the foundation for sustained and upward recovery still needs to be consolidated, the impact of external shocks has increased, and more proactive and effective macroeconomic policies need to be implemented, making full use of fiscal and monetary policies, accelerating bond issuance, lowering reserve requirements and interest rates in a timely manner, and creating new policy tools. On May 7, the State Council Information Office held a press conference to introduce the relevant situation of "a package of financial policies to support market stability and expectations." At the meeting, the central bank released 3 categories and 10 measures: firstly, quantitative policies, lowering the reserve requirement ratio by 0.5 percentage points, which is expected to release about 1 trillion yuan in long-term funds, effectively alleviating the financing pressure on steel enterprises and downstream steel-using industries, and improving market liquidity; secondly, price-type policies, lowering the policy interest rate by 0.1 percentage points, which is expected to lead to a 0.1 percentage point decrease in LPR, and simultaneously lowering the personal housing provident fund loan interest rate by 0.25 percentage points, with the five-year and above first-home loan interest rate dropping from 2.85% to 2.6%, and the interest rates of other terms adjusted simultaneously, which may stimulate home-buying demand and indirectly drive construction steel demand; thirdly, structural policies, adding 300 billion yuan in technological innovation re-loans and continuing to support the implementation of "two new" policies, the demand for steel used in manufacturing is expected to be released in the medium and long term, and stimulus policies are good news for steel demand.
Against the backdrop of declining demand and loose supply of raw materials, steel prices are mainly affected by the supply side of the market. Since the Spring Festival, demand recovery has been relatively slow, and supply remains a key factor determining the future trend of steel prices. On March 13, the National Development and Reform Commission issued a report on the implementation of the 2024 National Economic and Social Development Plan and the draft of the 2025 National Economic and Social Development Plan, which mentioned that the main tasks for 2025 include: continuing to implement crude steel output control and promoting the reduction and restructuring of the steel industry. In the medium and long term, crude steel output control has a certain supporting role in steel prices.
In terms of output, in early May, the willingness of key statistical steel enterprises to release crude steel production capacity remained strong. In early May 2025, key statistical steel enterprises produced a total of 22.05 million tons of crude steel, with an average daily output of 2.205 million tons, a month-on-month increase of 0.2% in daily output.
In terms of enterprise inventories, in early May, the steel inventories of key statistical steel enterprises increased. In early May 2025, the steel inventory of key statistical steel enterprises was 16.06 million tons, a month-on-month increase of 770,000 tons, an increase of 5.0%; an increase of 3.69 million tons compared to the beginning of the year, an increase of 29.8%; an increase of 20,000 tons compared to the same period last month, an increase of 0.1%; and a decrease of 220,000 tons compared to the same period last year, a decrease of 1.4%.
In terms of social inventories, social inventories have continued to decline since March, but the rate of decline is gradually narrowing. As of early May, the social inventory of five major steel varieties in 21 cities was 8.5 million tons, a month-on-month decrease of 350,000 tons, a decrease of 4.0%, and the rate of inventory decline slightly narrowed; an increase of 1.91 million tons compared to the beginning of the year, an increase of 29.0%; and a decrease of 3.05 million tons compared to the same period last year, a decrease of 26.4%.
Main issues to be concerned about in the future:
The severe situation of steel exports in 2025 has eased somewhat, but it still faces certain pressure. On the one hand, in 2024, there were as many as 33 trade original review cases targeting Chinese steel export products, and in 2025, they will be concentrated in the arbitration period, increasing the pressure on China's direct steel exports. Since the beginning of 2025, there have also been 8 trade original review investigation cases. On the other hand, the US Trump administration's continuously escalating tariff policies have also brought great pressure to global steel exports. Since February 1, several countries led by the United States have announced additional tariffs on steel products from China, including South Korea, Vietnam, and India, which are major export destinations for Chinese steel products. Overall, the global steel trade environment in 2025 will be more complex, and global market competition will intensify, but China's current international environment shows signs of easing. On May 4, the 28th ASEAN+3 (10+3) Finance Ministers and Central Bank Governors Meeting was held in Milan, Italy. The joint statement issued after the meeting warned that escalating trade protectionism would become a heavy burden on global free trade, calling for strengthening regional solidarity and cooperation to address the growing uncertainties; on May 6, China and the European Parliament decided to simultaneously and comprehensively lift restrictions on mutual exchanges, marking a key turning point in China-EU relations after years of setbacks; on May 12, the joint statement reached at the Sino-US Geneva trade talks was released. According to the joint statement, the United States will amend the ad valorem tariffs imposed on Chinese goods stipulated in Executive Order 14257 of April 2, 2025. Among them, the 24% tariff will be suspended for the initial 90 days, retaining the remaining 10% tariff, and withdrawing the 50% and 21% punitive tariffs imposed on April 8 and April 9. However, it should be noted that since "equivalent tariffs" do not involve steel and aluminum products, the impact on China's direct steel export environment is not significant. Currently, the steel industry still maintains a high tariff rate of over 70%, but it is beneficial to the export of electromechanical products including automobiles and home appliances, which is conducive to stabilizing indirect steel export demand. Steel enterprises should closely monitor changes in international market demand, the impact of global trade protectionism on exports, and adjust export strategies in a timely manner, while also seeking new market opportunities and expanding emerging markets to diversify risks.
Steel enterprises need to pay attention to changes in demand and arrange production reasonably. In April, the daily crude steel output of key steel enterprises showed a trend of "rising first and then falling." Affected by the strengthening of domestic incremental policy expectations, the weakening of cost support, and the "rush for exports effect," the willingness of steel enterprises to release production capacity remained strong from April to early May. Entering May, the steel market gradually shifted from peak season to off-season, steel demand will gradually decline, and enterprise inventories will gradually show a phased accumulation trend, and the pressure on the fundamentals will become apparent. In mid-to-late May, as the rainy season and high temperatures in the south may further inhibit the rebound in demand, coupled with the continued weakness of real estate investment, the demand for steel products may accelerate its decline, and the overall inventory pressure will gradually increase. In May, the steel industry faces the risk of high supply and weakening demand. Steel enterprises need to arrange production reasonably to prevent further price declines due to the intensification of the supply-demand contradiction.
