Experts say city—January 12

My Steel: On the supply side, last Friday, the supply of the five major steel products reached 81.859 million tons, an increase of 34,100 tons, or 0.4%, from the previous week. With the exception of wire rod, the output of the other four major steel products all rose week-on-week, driven primarily by the recovery of steel mill profits and the resumption of production at existing lines. In terms of inventory, the total inventory of the five major steel products last week stood at 12.5392 million tons, up 2.177 million tons, or 1.77%, from the previous week. The total inventory of the five major products increased week-on-week: factory inventories rose week-on-week, with the main contribution coming from rebar; social inventories also rose week-on-week, again largely due to rebar. On the consumption side, the weekly consumption of the five major products last week was 7.9862 million tons, down 5%. Among these, construction material consumption fell 13.5% week-on-week, while plate consumption declined 0.8% week-on-week. The apparent consumption of the five major products showed a double decline in both construction materials and plates last week (Note: the previous period’s social inventory cycle was 6 days; this period’s social inventory cycle is 8 days. Therefore, the apparent demand and change figures for this period are adjusted values based on both factory and social inventory cycles being 7 days long). On the supply side, given that profit levels remain generally acceptable and inventory pressure is not significant, it is expected that production will continue to rise in the coming period. On the demand side, demand remains in a seasonal downward trend, and it is anticipated that demand for finished steel products will likely continue to decline, leaving insufficient support for demand. Regarding inventory, the total inventory of the five major steel products rose week-on-week last week, with the increase mainly attributable to rebar. Overall, recent strong performance in coking coal and coke has boosted the finished steel market. Coupled with the warming macroeconomic environment and improving market sentiment, steel prices have shown volatile upward trends in the short term. However, underlying fundamentals still face pressure, so continued attention should be paid to future price developments.

Steel Home: Last week, the first week of the new year, domestic steel prices experienced volatile but generally strong movements. At the beginning of the week, prices tended to be weaker, but mid-week, driven by a sharp rise in black commodity futures, spot prices saw a noticeable increase. By the weekend, however, prices weakened again. The substantial rise in black commodity prices mid-week was closely linked to the recent sharp increases in precious and non-ferrous metals. Following large-scale copper stockpiling in the U.S. and China’s tightening of silver exports, resources are likely to become key targets for capital allocation. Judging from recent market trends, the current situation of weak supply-demand balance remains unchanged. The market will gradually enter a period of inventory accumulation ahead of the Spring Festival, and short-term actual demand will gradually weaken. As a result, steel price fluctuations will increasingly be influenced by capital flows and policy factors. We expect domestic steel prices to remain stable with a slight downward bias this week.

Lange: 2026 marks the inaugural year of the 15th Five-Year Plan. We must adhere to the general principle of pursuing progress while maintaining stability, implement more proactive and effective macro policies, continue to pursue a moderately accommodative monetary policy, leverage the synergistic effects of both new and existing policies, step up counter-cyclical and cross-cyclical adjustments, enhance the forward-looking, targeted, and coordinated nature of macro policies, continuously expand domestic demand, optimize supply, improve new growth drivers, and revitalize existing ones. We should focus on stabilizing employment, businesses, markets, and expectations, and promote a qualitative improvement in economic performance coupled with reasonable quantitative growth. Looking at the black commodity futures market, black commodities experienced significant volatility last week, with most varieties staging a strong rebound before retreating. The main rebar contract for May closed at 3,144 yuan, down 35 points from the previous day, but still 22 points higher than the closing price on Wednesday of the previous week (the last trading day before the holiday, same hereafter). The weekly settlement price was 3,145 yuan, up 11 points from the previous week’s close. The latest open interest stood at 1.715 million contracts, an increase of 210,000 contracts. Despite substantial intraday liquidation, since the start of January, funds have rapidly returned to the market, pushing open interest to a new high for this contract. On a weekly basis, the closing price slightly exceeded the previous week’s weekly average, yet both the upper and lower shadows of the weekly candlestick were relatively long, indicating a tight balance between bullish and bearish forces. The short-term intraday adjustments are not yet over; we should be cautious about encountering resistance around the 3,150-yuan mark, which could prompt another downward move toward support levels before looking for opportunities to rebound. This week, the market is expected to remain volatile, with a reference trading range of 3,100–3,200 yuan. In the spot steel market, on the supply side, due to profit-and-loss impacts across different product categories, steel mills have continued to ease their capacity release, leading to a sustained decline in molten iron production, though output of specific products has risen slightly. On the demand side, as the traditional off-season effect continues to intensify, end-user demand has gradually weakened. However, influenced by policy expectations, both the futures and spot markets have seen rapid price increases; overall, construction material transactions have slightly increased, while plate transactions have edged down slightly. On the cost side, with iron ore prices fluctuating mildly, scrap steel prices rising slightly, and coking coal prices declining somewhat, the overall cost support has softened slightly. Therefore, the Lange Steel Research Center forecasts that, under the combined influence of ongoing macro policy expectations, a deepening off-season effect, continued weakening of supply releases, mixed trends in spot and futures transactions—with construction materials increasing and plates declining—and slightly weaker cost support, the domestic steel market is likely to remain volatile and weaken this week.

Tang and Song: As we enter mid-January this week, continued rainfall in the south and persistently low temperatures in the north will further slow down construction activities on-site, weighing on actual steel demand. Consequently, demand is naturally set to decline. Coupled with the recent rise in steel prices, valuations have reached a neutral-to-high level, prompting a corresponding drop in speculative demand. As a result, demand is accelerating its downward trend. On the supply side, with the recent increase in steel prices, steel companies’ losses have narrowed, and iron-ore production has already fallen to relatively low levels, leaving insufficient room for further reductions. Some enterprises have completed maintenance and are resuming production, so there’s a possibility of a slight price rebound. We expect supply to remain relatively stable or even see a modest increase this week. In terms of inventories, as demand continues to shrink while supply remains relatively steady, steel inventories are likely to accumulate for the second consecutive week, entering a seasonal accumulation phase. Regarding costs, as delivery approaches, iron-ore prices face downward pressure; although coking coal prices have remained stable for now, the market still anticipates a fifth round of price cuts, making it difficult for raw materials to provide solid bottom support for finished steel products. On the macro front, the U.S. December ADP employment data fell short of expectations, sparking concerns about a global economic slowdown and causing the overall commodity rally to lose momentum. Domestically, key economic data for the fourth quarter of 2025, including GDP figures, will be released this week. Market consensus forecasts that GDP growth will slow to between 4.3% and 4.6% year-on-year, putting short-term sentiment under pressure. Additionally, as black commodities approach delivery, prices of raw fuels may experience some impact, potentially driving market volatility higher once again. Nevertheless, positive factors remain: the December manufacturing PMI has returned to the expansion zone, signaling marginal improvement in domestic demand; meanwhile, the central bank has explicitly included “promoting a reasonable recovery in prices” as a policy goal and emphasized the flexible use of tools such as reserve requirement ratio cuts and interest rate reductions. Expectations are growing that easing policies will be implemented before the Spring Festival, providing support for a moderate economic recovery in the first quarter. In the short term, the steel market faces triple pressures—rapidly shrinking demand, accumulating inventories, and insufficient cost support—significantly limiting upward momentum. Considering macroeconomic policy expectations and PMI data, which offer some degree of support, we anticipate that steel prices will mainly fluctuate and adjust this week. For rebar futures, watch closely for support around 3,090 yuan per ton at the lower end and resistance around 3,190 yuan per ton at the upper end.

Han Weidong: After the New Year, the stock market kicked off with a strong start, and commodities in the black metals sector experienced a rebound. Since China’s stock market shifted its policy direction in September 2024, its underlying logic has undergone a fundamental transformation—from hovering around 2,000 points to climbing to 4,000 points. The rise in gold and silver prices also reflects, from a side perspective, global turmoil and uncertainty as well as the logic of seeking safe-haven assets. However, the contradiction and underlying logic of oversupply in the black metals sector have remained unchanged. As a result, since September 2024, the price of Tangshan strip steel—a key indicator—rose by 700 yuan from 3,000 yuan, only to gradually decline again, eventually returning to its pre-rise level of 3,080 yuan by June 2025. Then, after briefly reversing the downward trend with a 300-yuan “anti-involution” rally, it once more fell back to its earlier low of 3,090 yuan before recently starting another rebound. The reason why this steel price rebound cannot last is that the industry’s internal logic has not changed at all. Unless the industry adopts self-discipline through production cuts or undergoes genuine supply-side reforms in the later stages, this rebound will still fail to sustain itself. In January, the most important thing is to achieve a “strong start”—this has a huge impact on businesses’ confidence for the entire year. Moreover, it’s crucial to have a well-thought-out strategy for the Spring Festival period; under no circumstances should you gamble on the market. Economist Ma Guangyuan has repeatedly emphasized over the past two months that China has entered a new major cycle—and “respecting the cycle is every entrepreneur’s most important task!”