Rebar prices are expected to remain strong in the short term.
The market expectation for the off-season in June remained pessimistic, Steel prices showed an oscillating trend. In July, driven by the sentiment of "anti-involution," steel prices rebounded to a certain extent, but the rebound was significantly weaker than that of raw materials. The reason is that in the first half of the year, steel companies generally had good profits, and pig iron production remained high, leading to increased market demand for raw materials. At the same time, coking coal itself also has "anti-involution" driving factors, and after the safety inspection month in June, the domestic coking coal resumption progress is still slow.
Overall, on the one hand, the supply-demand contradiction has not yet become prominent, and both domestic and international demand have a certain resilience; on the other hand, the off-season market focuses more on expectations, with expectations of favorable domestic policies and expectations of interest rate cuts overseas. It is expected that steel prices will maintain an oscillating and strengthening trend in July. However, the increase in steel prices during the off-season may lead to a rebound in supply, coupled with the pressure on demand in the second half of the year. If no specific policies are implemented on both the supply and demand sides, it is expected that the upward pressure on steel prices will gradually increase from mid-to-late August.
Demand remains resilient
In the first half of the year, export, infrastructure, and manufacturing demand showed strong resilience. From January to June 2025, China's steel exports reached 58.147 million tons, a year-on-year increase of 9.2%. Although exports to Vietnam, India, and South Korea have decreased, exports to Thailand and the Philippines in Southeast Asia have maintained high growth, and the growth rate in Africa, South America, and Turkey has also been significant. In terms of export varieties, building material exports offset the reduction in plate materials, Steel billet exports also increased significantly.
The global manufacturing PMI is showing a rebound. In June 2025, the JPMorgan Global Manufacturing PMI was 50.3%, up 0.8 percentage points from the previous month, returning above the boom-bust line. Coupled with the easing of Sino-US relations and the rising expectation of interest rate cuts by the Federal Reserve, expectations for both direct and indirect steel exports are improving.
Domestically, fiscal policies were implemented earlier in the first half of the year, with faster progress in special bond issuance and water conservancy investment growth of 15.4% in the first half of the year. In the manufacturing sector, driven by policies such as trade-ins and equipment upgrades, demand in the automotive, home appliance, and machinery industries performed well in the first half of the year. Short-term demand can still remain stable, and the demand for raw materials is better than that of finished products, and cost-side support is rising. However, there is also a risk of weakening demand in the second half of the year. Under the background of high US tariffs, the amount of steel indirectly exported to the US from China will still face certain pressure. Domestic real estate data remains weak and will continue to drag down steel demand.
In terms of infrastructure, the growth rate of narrow infrastructure investment (excluding electricity) has fallen. In June, the manufacturing PMI remained below the boom-bust line, the growth rate of manufacturing investment fell to 4.9%, and the year-on-year growth rate of home appliance production plans also fell.
Overall, although there is resilience in the short-term demand side, if there is a lack of sustained favorable policies, subsequent demand will face downward pressure.
Cost support rises
On the supply side, the sixth meeting of the Central Financial Committee held on July 1 clearly required the governance of low-price and disorderly competition among enterprises in accordance with the law, promoting the orderly exit of backward production capacity, and the market's expectation of benchmarking the supply-side structural reform of 2016 has increased. On July 18, the Ministry of Industry and Information Technology stated that steel, Non-ferrous metals , petrochemicals, building materials and other ten key industries' steady growth work plan will be released soon, which will promote key industries to adjust their structure, improve supply, and eliminate backward production capacity, further strengthening policy expectations. Domestic steel enterprises have advanced technology, high output value, and are closely related to the national economy, but their profit levels are weak, so it is necessary to adjust supply to promote price rebound. If capacity reduction measures are implemented, the upward space for steel prices is expected to be further opened.
Currently, both the supply and demand sides and the cost side provide support. Policies to optimize supply and eliminate backward production capacity continue to strengthen the market's expectations for supply-side structural reforms. The basis is at a low level, and the positive arbitrage trading is active, driving the spot price. Downstream inventory replenishment has started, and actual demand is performing well. Affected by the slow progress of domestic coal mine resumption, Coking coal prices continue to strengthen, Coke spot prices have risen, and cost-side support continues to rise.
In summary, both the macro and industrial levels support steel prices. In the short term, Rebar the strong trend may continue, but long-term price increases still require sustained policy implementation. Risk factors to be concerned about include: unexpected increase in steel supply or unexpected decrease in demand.
