The current market structure remains weak, with threaded steel facing downward pressure.
October Reinforcing steel bars The spot and futures prices initially showed a downward trend before rebounding. The most active futures contract fell as low as 3,021 yuan/ton, but as trade tensions eased and market sentiment improved, prices began to rise again, with the main contract climbing back up to a high of 3,143 yuan/ton. Threaded steel spot prices Primarily following the futures market trend, price fluctuations were slightly lower, while basis weakened somewhat.
Late October, threaded Steel prices The rebound from the bottom was primarily driven by the short-term fermentation of positive factors. First, the overall macroeconomic environment has improved—on one hand, China’s “15th Five-Year Plan” has been unveiled; on the other hand, the easing trade tensions have injected fresh momentum into the market. Second, Tangshan has recently ramped up its Level-II emergency response for severe pollution weather on multiple occasions, leading to production restrictions that have tightened steel supply and, in turn, boosted steel prices. Finally, strong raw material prices have provided solid cost support, while growing expectations of an "anti-inward spiral" continue to gain traction. Coal prices Strongly operating, Coke Price hikes continue to take effect, Iron ore prices Returning to the year's highest level, significantly pushing up steel costs.
Supply is seeing a recovery.
However, the recent collective upward movement in black metal prices has been primarily driven by optimistic market sentiment, with limited supportive actions from the industrial sector, raising doubts about its sustainability. Specifically, both supply and demand for threaded steel are on the rise: construction steel mills have slightly increased production, pushing output to relatively high levels. Meanwhile, inventory levels remain elevated, putting growing pressure on suppliers. As of the week ending October 31, weekly threaded steel production stood at 2.1259 million tons—up 55,700 tons from the end of September. Although production dipped briefly to as low as 2.0116 million tons during that period, it has steadily rebounded over the past two weeks, reaching one of the year’s highest points so far.
Breaking down the production process, the recovery in threaded steel output is largely attributable to increased output from long-process steelmakers, whose latest weekly production reached 1.8308 million tons—a cumulative rise of 83,500 tons over the past two weeks. Notably, this rebound in long-process output occurred despite a decline in molten iron production, suggesting that many mills have shifted toward producing threaded steel instead. However, under conditions of low profitability and weak demand, the room for further production expansion remains limited.
On the other hand, short-process steel plants have maintained relatively stable operations, continuing to churn out high volumes of threaded steel at around 295,100 tons per week—still up 37,000 tons compared to the end of the month. Given the recent improvement in profitability at these short-process facilities, it’s reasonable to expect that their output will likely stay robust and steady in the near term.
Moreover, Rebar Inventory Although recent sales have helped reduce inventory levels, the decline has been limited, leaving stocks still at historically high levels for this time of year. Under comparable metrics, total rebar inventories stand at 6.0252 million tons—yet even the drop over the past three weeks merely offset the increase seen during the extended holiday period, resulting in a slight month-on-month rise of 27,000 tons. Meanwhile, current inventory levels remain elevated compared to recent years, up by 1.6524 million tons—or 37.79%—from the same period last year. The inventory-to-sales ratio now sits at 2.595, representing a year-over-year increase of 42.82%, underscoring significant inventory pressure.
Looking ahead, production at peak-season construction steel mills appears to be stabilizing, with rebar output gradually rebounding from its recent lows. While this has led to a modest uptick in supply, the overall improvement in industry dynamics remains limited. On the positive side, however, most regions are benefiting from this trend. Reinforcing Steel Varieties Steel profits per ton remain sluggish, potentially dampening production enthusiasm and limiting supply growth. However, with inventory levels still relatively high, the pressure hasn’t eased yet.
Demand expectations are expected to weaken.
Threaded steel demand showed a seasonal rebound, but downstream industries remain sluggish, and with the off-season approaching, demand is expected to weaken further. As of the week ending October 31, weekly apparent demand for threaded steel stood at 2.3219 million tons—a third consecutive weekly increase after the holiday period, yet still below pre-holiday levels, dropping by 88,800 tons compared to the previous week. Notably, the current level remains the lowest for the same period over the past five years, marking a year-on-year decline of 84,900 tons. Meanwhile, total threaded steel demand in October reached 9.2727 million tons, up slightly from the prior week—primarily due to seasonal improvements—but overall still significantly lower than typical levels for this time of year. Compared to the same period last year, demand plunged by 1.3601 million tons, representing a steep drop of 12.79%, underscoring the weak performance of threaded steel demand. At the same time, high-frequency daily trading data continued to show a lackluster trend, with nationwide major traders as of October 31 Architectural steel The average daily trading volume in October was 101,300 tons, a month-on-month decrease of 1.13%, while the year-on-year decline reached 16.51%, largely due to weakening speculative demand. However, other downstream indicators for construction materials have shown some recent recovery, according to data compiled by Mysteel. Cement Outbound quantity and Concrete Shipment volumes increased by 8.34% and 6.71% respectively compared to the previous month, primarily due to accelerated construction efforts in some regions. However, given that funding for construction projects has yet to improve, coupled with the approaching off-season demand in northern markets, the recovery in building material demand is expected to remain weak and unsustainable. Overall, while rebar demand showed a seasonal uptick during "Golden October," as evidenced by high-frequency indicators signaling a bottoming-out and subsequent rebound, it still remains at historically low levels for this time of year, indicating an overall lackluster performance. Moreover, considering that the underlying fundamentals of the real estate sector continue to recover slowly, infrastructure investment growth is decelerating, and downstream industries reliant on building materials have yet to show signs of improvement, rebar demand is anticipated to weaken as the off-season approaches. As a result, persistently weak demand will likely continue to weigh on steel prices.
In summary, thanks to improving market sentiment and strong cost support, Rebar prices Recently, prices have rebounded from their recent lows, but with both supply and demand on the rise, underlying fundamentals remain unchanged—there’s no substantial improvement. As a result, the upward momentum lacks sustainability. Once market dynamics shift to the industrial side, steel prices are likely to face downward pressure amid the current weak-market conditions. Therefore, it’s crucial to closely monitor demand trends. (Author’s affiliation: Baocheng Futures)
