Experts say the city—September 22

My Steel: On the supply side, last week the combined supply of the five major steel products reached 8.5546 million tons, a decrease of 17,800 tons—or 0.2%—compared to the previous week. Steel production this period saw a slight decline, primarily driven by a more pronounced drop in rebar output. Meanwhile, total steel inventories for the five major products stood at 15.1974 million tons last week, up 51,300 tons (or 0.3%) from the prior week. Overall, inventories of the five key steel varieties continued to rise, though the trends diverged significantly between construction materials and plate products: while construction material stocks began to decline, plate inventories continued to accumulate. On the consumption front, weekly demand for the five major steel products totaled 8.5033 million tons last week. Notably, construction material consumption increased by 4.3% compared to the previous week, whereas plate consumption edged down by 0.9%. Once again, consumption patterns among the five product categories showed clear differentiation. From the supply perspective, rebar production is unlikely to see substantial further declines in the near term, meaning output may remain at its current low levels. Similarly, hot-rolled coil production is expected to stay relatively flat, with only minor reductions anticipated. On the demand side, however, the lack of strong momentum behind the rebound in apparent consumption of rebar and hot-rolled coils suggests that steel demand will likely continue to recover slowly, staying largely at seasonal baseline levels. In terms of inventory dynamics, steel stock levels are showing mixed trends. With rebar production remaining persistently low, there’s limited pressure to draw down rebar inventories. Conversely, high output levels of hot-rolled coils have kept their inventories from declining rapidly. That said, as pre-National Day holiday restocking needs emerge, inventories of these products could still see some destocking pressure.

Steel Home: Since September, the domestic steel market has generally continued its pattern of mild fluctuations, with macroeconomic factors exerting limited influence on the market. On the supply side, according to surveys by Steel Home, blast furnace utilization rates have remained consistently above 91%, while electric furnace operations saw a slight decline. Steel plants continue to maintain high production levels, though further capacity expansion remains constrained. Meanwhile, on the demand side, downstream sectors are experiencing a seasonal uptick in activity—albeit weaker than in previous years at this time. Steel inventories have shifted from rising to falling, and steel transactions have improved slightly compared to last week, though the gains remain modest. From a cost perspective, the second round of coking coal price reductions has officially taken effect across major regions; however, iron ore prices have recently fluctuated at relatively high levels. While costs still find some support, their upward momentum is waning. As the "National Day holiday" approaches, both steel products and raw materials are likely to see increased restocking demand. Consequently, the domestic steel market is expected to maintain its current trend of moderate strength amid ongoing volatility this week.

Lange: Currently, China's macro policies are working in synergy, leading to generally stable performance in the national economy. Transformation and upgrading continue to advance steadily, yielding new achievements in high-quality development. However, we must also recognize that the external environment remains complex and challenging, marked by numerous instabilities and uncertainties. Meanwhile, domestic market supply outpaces demand, creating operational difficulties for some enterprises. Looking ahead, we must adhere to the overarching principle of pursuing progress while maintaining stability, fully, accurately, and comprehensively implementing the new development philosophy. We will accelerate the establishment of a new development paradigm, rigorously implement and refine all macroeconomic policies, and focus on stabilizing employment, businesses, markets, and expectations. At the same time, we will strengthen macro policy adjustments, effectively unlock domestic demand potential, deepen reform, opening-up, and innovation, bolster the robust domestic economic loop, foster seamless domestic-international linkages, and drive steady, healthy economic growth. Looking at the black commodity futures market, most contracts closed higher on Friday, with coking coal—the main contract—leading the gains at a 1.36% increase. Iron ore, coke, and threaded steel bars all posted similar gains, while hot-rolled coil performed the weakest. The most active threaded steel bar contract ended at 3,172 yuan, up 23 points from the previous day and 25 points higher than last week’s close. The weekly settlement price was 3,159 yuan, up 10 points from the prior week. Current open interest stands at 1.97 million contracts, down 30,000 from last Friday. Notably, open interest has shifted from increasing last week to decreasing this week, indicating that both long and short positions have seen relatively limited profit-taking opportunities. Nonetheless, the weekly chart for threaded steel bars closed strongly, with the closing price significantly above last week’s level. This week, traders will continue to monitor the rebound strength, with potential targets hovering around 3,206 yuan. In the spot steel market, on the supply side, steelmakers are ramping up production capacity due to favorable profit margins across various product lines and expectations of a peak season ahead. As a result, molten iron output has risen slightly, though output of specific steel products has declined. On the demand side, as the market transitions from the off-season into the peak season, retailers are increasingly eager to stock up; however, trading activity remains volatile. From a cost perspective, iron ore prices have experienced mild fluctuations, while scrap steel prices have edged upward amid stable conditions. Meanwhile, coking coal prices edged lower, yet overall, production costs remain resilient. Given these dynamics—marked by a complex and challenging external environment, coordinated macroeconomic policy support, an unexpectedly subdued traditional peak season, rising supply pressures, uneven market trading patterns, and persistent cost resilience—the Lang Steel Research Center anticipates that China’s domestic steel market this week will likely exhibit a mixed and volatile trend.

Tang and Song Dynasties: This week coincides with the peak "Golden September" season, typically characterized by heightened market activity. Looking at current market trends, the intense heat in southern regions has begun to ease, which should help boost consumer demand. Indeed, market demand is already gradually recovering, and this positive momentum is expected to continue—and even strengthen—throughout the week. However, the sustainability and strength of overall demand remain somewhat uncertain. On one hand, the sluggish real estate market continues to weigh heavily, with fewer new construction projects being initiated, thereby significantly restraining the demand for construction steel. On the other hand, while some manufacturing sectors are experiencing a modest rebound in demand, the broader recovery process remains slow, making it difficult to generate robust, widespread traction for steel consumption. Meanwhile, downstream businesses remain cautious in their purchasing practices, largely opting for on-demand procurement, which suggests that demand will likely see only a narrow, incremental increase. On the supply side, although the Tangshan region has implemented production restrictions due to air quality concerns, steelmakers have primarily focused on curtailing sintering activities rather than overall output. As a result, these measures have had only a limited impact on national steel production levels. Moreover, steel enterprises across other parts of China continue to operate at relatively high capacity, keeping overall supply pressure persistently high. Additionally, as steel prices fluctuate, profit margins for some steel mills have narrowed—but not yet reached the point of widespread losses. This situation has tempered steelmakers' willingness to cut production, leading to a relatively delayed adjustment on the supply side. Meanwhile, independent electric arc furnace (EAF) producers continue to face deep losses, which has kept rebar production at a modestly reduced level. Overall, we anticipate a slight decline in steel supply this week. Looking ahead, we expect steel supply to edge downward slightly, while demand sees a modest uptick. This should further ease the ongoing supply-demand imbalance, potentially leading to a small reduction in inventory levels. In recent days, the Federal Reserve delivered its expected 25-basis-point interest rate cut, spurring renewed speculation about a possible rate cut by China’s central bank later this week—though the likelihood remains relatively high. Coupled with growing market expectations surrounding the upcoming Politburo meeting at month-end, investor attention is increasingly focused on policies aimed at stabilizing growth and combating inward competition. It’s worth recalling last year’s dramatic "924" rally, whose lasting impact and lessons remain fresh in investors’ minds. Yet compared to last year, market participants now exhibit a markedly more cautious mindset, prioritizing risk management over aggressive moves. In the short term, while the steel supply-demand imbalance shows signs of easing, the room for meaningful improvement remains constrained. At the macro level, however, there are still positive expectations driving the market forward. Nevertheless, the underlying supply-demand dynamics persist, with inventories continuing to accumulate—a scenario that carries significant risks of negative feedback. Given these factors, steel prices are likely to trade within a volatile range this week, with no clear directional bias. For rebar futures, keep an eye on the resistance level around 3214; above this mark, exercise caution and manage risks carefully. On the downside, watch closely for support near 3100.

Han Weidong of Youfa Group: Both domestic and international macro factors that have been unsettling the market have now materialized, signaling that the market is gradually shifting back to its fundamental drivers. Currently, steel production remains at a high level—this is clearly reflected in the output data from key steel enterprises released by the China Iron and Steel Association in early September, as well as the molten iron production figures published on industry websites. However, given the broader economic environment this year, it’s unlikely that such elevated production levels can sustain indefinitely. Right now, what’s propping up the market are robust seasonal demand and growing expectations of an end to cutthroat competition within the industry. But this window of opportunity—driven by strong near-term demand—is rapidly closing; we only have about 10-plus days left until the end of the month. So, everyone should seize this chance to ramp up sales and maximize profits while they still can. By October, traditional long holidays typically lead to a month-on-month decline in demand, putting significant pressure on regions where inventory levels already surpass historical highs for this time of year. Moreover, with futures delivery looming later this month, the combination of high production, elevated inventories, large open interest, substantial delivery volumes, and widening basis premiums between futures and spot prices is set to create considerable market volatility. After October, northern China will officially enter its off-season, and once the pattern of northern steel moving southward shifts, it could severely disrupt steel prices in the northern region. As a result, October is very likely to become a "turbulent autumn" for the market. At present, prices are above the annual average, while production remains at historically high levels—conditions that don’t exactly call for building up additional inventory. Instead, companies should maintain prudent, balanced stock levels and focus on steady operations. Even during the upcoming holiday period, avoid piling up excessive inventory, as this could leave you vulnerable to future market swings. Fortunately, though, there’s limited room for steel prices to fall further. Overall, the market continues to fluctuate within a narrow range, with prices currently hovering around the median level. This year, the market hasn’t seen dramatic price movements or major speculative opportunities. For instance, yesterday, the price of Tangshan strip steel was actually on par with the winter stocking prices from last year’s Spring Festival—and remarkably close to the average price level for January through September. In short, this year, the real path to success lies not in chasing fleeting market trends but in optimizing operational efficiency. China’s steel market is vast enough that even a modest annual decline of just 1% or 2% translates into ample room for businesses to thrive. The key, however, is to fundamentally transform your business model and identify the most effective, personalized approach to generating profit. Don’t hesitate to reach out to those around you who’ve already found success—they’re often more than willing to share their insights over a cup of tea. With the right mindset and strategies, you’ll undoubtedly find your way to sustainable growth and profitability.