2026 China Steel Market Outlook

Looking ahead to the Chinese steel market in the coming year, it is expected that the macro economy will continue to recover positively, while the external environment is set to improve. Manufacturing, new-quality productivity, infrastructure projects aimed at improving people's livelihoods, and steel exports will once again serve as the "stabilizing anchor" for overall steel demand. However, pressure on steel production supply remains significant, leading to broad, volatile fluctuations in steel market prices throughout the year.
    

First, the overall demand for steel (including exports) continues to expand without change. Due to the fact that the nationwide macroeconomic outlook for 2026 remains positive and continues its recovery trend—driven by stable growth in key indicators closely tied to total steel demand, such as industrial production, fixed-asset investment, and exports—we expect the nation’s overall steel demand (including exports, hereinafter the same) in 2026 to increase by approximately 3%, or even more.

As the overall demand for steel increases, the structure of steel demand will show distinct trends. Among them, steel consumption in the manufacturing sector will remain robust, serving as a stabilizing force driving the total steel demand in the coming year. In particular, fostering and developing new forms of productive forces continues to be a key growth driver for steel consumption. Looking ahead, one prominent trend in the evolution of these new productive forces is the increasing substitution of humans by robots—leading to widespread adoption of leaner, even fully automated factories, mines, ports, commercial facilities, and agricultural and pastoral operations. This shift also underscores a critical direction for large-scale equipment upgrades throughout 2026, thereby generating exceptionally strong demand for robotics and highly automated production lines. By 2026, national output of electric vehicles, wind and photovoltaic power-generation systems, charging infrastructure, various types of robots, and advanced high-tech equipment is expected to maintain robust growth, further fueling intense steel demand in these sectors.

Although nationwide real estate development investment may bottom out and rebound within the coming year, easing its drag on overall fixed-asset investment and boosting steel demand for such investments, it will still remain weaker than steel demand from the manufacturing sector. As a result, during the next year, demand for production-oriented steel products like various plate materials and special steels is expected to outperform that for construction-oriented steels such as rebar.

Second, steel exports continue to maintain a substantial volume. The 4th Plenary Session of the 20th Central Committee of the Communist Party of China emphasized expanding high-level opening-up, safeguarding the multilateral trading system, and broadening international economic circulation, so as to share opportunities and achieve common development with countries around the world. Guided by this overarching policy direction, coupled with the fact that Chinese steel products—and steel-intensive goods—are both high-quality and competitively priced, making them indispensable in global economic growth and the global industrial chain, coupled with China's strategic adjustment toward "diversifying export destinations" and its increased focus on boosting exports to countries participating in the Belt and Road Initiative, it is anticipated that by 2026, China's steel exports and steel-intensive product exports will both maintain their substantial scale. Specifically, China's direct steel exports are expected to remain robust at around 100 million tons, though the pace of growth will continue to slow down. Meanwhile, the indirect steel exports generated through the export of steel-intensive products such as automobiles, home appliances, and machinery equipment will keep rising steadily, accounting for nearly half of China's total steel exports. Preliminary estimates suggest that by 2026, the combined exports of crude steel (including both direct and indirect exports of steel and steel-intensive products) will account for more than one-quarter—or even exceed—China's domestic crude steel production.

Third, domestic steel production continues to rise without slowing down. Within the next year, the growing total market demand (including exports) will inevitably require a corresponding expansion of domestic steel production to sustain the growth trend seen over the past several years. Preliminary estimates suggest that by 2026, the nation's actual steel output could surpass the 1.5-billion-ton mark—up roughly 3% from the previous year.

In the structure of steel production, driven by adjustments in demand, the output levels of various plate products and special steels—tailored to serve sectors such as new-quality productivity, high-tech equipment, national defense, automotive, power generation, shipbuilding, construction machinery, and home appliances—are expected to continue expanding. Meanwhile, the growth rate of construction steel—primarily used in infrastructure projects, especially real estate development investments—has remained relatively sluggish, with some even showing signs of contraction.

Fourth, market prices are experiencing wide-ranging fluctuations within a broad trading range. 2026 marks the first year of implementing the "15th Five-Year Plan." To achieve a strong start and lay a solid foundation for fulfilling the goals set forth in the five-year plan, China’s nationwide macroeconomic regulation policies have become more proactive and robust. Efforts are being made to boost steel demand across multiple sectors, particularly driving the demand for high-quality, innovative steel products to new heights—thereby injecting fresh vitality into the steel market. On the other hand, 2025 has brought with it significant uncertainties for both the macroeconomy and the steel market. The challenging global trade environment persists, while pressures from overcapacity in steel production continue to loom large. These conflicting forces—both bullish and bearish factors—will likely keep steel prices in China volatile throughout 2026, with price fluctuations expected to be even more pronounced than in the previous year.

It's worth noting that if China and the U.S. reach an agreement smoothly, the "tariff war" will largely "die down," especially if most or all of the previously imposed U.S. tariffs are lifted. This would undoubtedly boost sentiment in the steel market significantly. Coupled with self-discipline among steel companies—specifically, their commitment to genuinely reduce steel and finished-product output—the currently depressed steel prices are likely to stage a substantial rebound, ultimately pushing the national average steel price higher from its current low point. .(Original article by Langge expert Chen Kexin—please attribute the source when reprinting.)