Experts say city—January 26

My Steel: On the supply side, last Friday, the supply of the five major steel products reached 81.959 million tons, unchanged from the previous week. In this period, the product mix of steel production showed some divergence: construction materials saw increased output, while plate and coil production declined. Last Friday, the total inventory of the five major steel products stood at 12.5708 million tons, up 100,700 tons from the previous week—a rise of 0.8%. Overall, inventories of the five major steel products rebounded slightly last week, with a differentiated trend in construction materials and plates: construction materials experienced an accumulation of inventories, while plate inventories declined. Specifically, construction materials accumulated by 148,700 tons, whereas plate inventories fell by 48,000 tons. On the consumption side, last week’s weekly consumption of the five major steel products totaled 8.0952 million tons. Among these, consumption of construction materials fell by 0.8% from the previous week, and plate consumption dropped by 2.6%. The consumption patterns for construction materials and plates remained consistent across the five major steel products last week. As the off-season deepens further, there is limited room for improvement in demand for rebar and hot-rolled coils. With seasonal demand weakening ahead of the Lunar New Year, steel inventory pressure may continue to build. Currently, the seasonal trends in the black metals market are quite pronounced; prices of finished steel products lack clear drivers and tend to follow fluctuations in raw material prices. Among them, hot-rolled coils have relatively stable fundamentals: unexpected maintenance at steel mills in North China has led to a contraction in hot-rolled coil supply, while demand has been declining more slowly than in recent years during the same lunar calendar period. As a result, the pace of inventory reduction has reached a new high for the same lunar calendar period over the past decade. Attention should be paid to the pace of steel mill resumption of production and the support that replenishment of raw material inventories could provide for black metal prices.

Steel Home: Last week, domestic steel prices remained generally stable with a slight downward trend, and price movements across regions were largely unchanged. Currently, the fundamental supply-and-demand dynamics in the steel market have not undergone significant changes. First, as the Spring Festival holiday approaches, downstream demand is gradually weakening, leading to a decline in overall steel transaction volumes and a gradual accumulation of inventories in the market; merchant sentiment remains relatively stable. Second, the blast furnace operating rate has continued to decline slightly recently, and electric arc furnaces will also enter seasonal shutdowns in the coming period. As a result, overall supply is unlikely to rebound significantly. Steel mills are showing strong willingness to maintain prices and have generally raised their quotes for hot-rolled and cold-rolled coils for February and March. Overall, the steel market has been in a state of weak equilibrium recently, and it is expected that domestic steel prices will continue to fluctuate slightly this week while remaining broadly stable. Key areas of focus include the impact of futures on spot prices, steel mill production levels, and changes in the intensity of steel inventory accumulation.

Lange: Looking at the black commodity futures market, black commodities as a whole closed higher. The most active coking coal and coke contracts rose by 2.84% and 2.59%, respectively. The main rebar contract for May delivery closed at 3,142 yuan, up 18 points from the previous day, but down 21 points from last Friday’s closing price. The weekly settlement price was 3,132 yuan, down 32 points from the previous week. Current open interest stands at 1.741 million contracts, a decrease of 14,000 contracts from the previous week. Open interest remained relatively stable over the past week, indicating that there is no strong market driver and funds are relatively calm. Although the weekly chart has moved closer to last week’s price level from its lower position, the price center of gravity remains below last week’s level. This week, attention should be focused on the trading dynamics around the 3,140-yuan mark. While short-term rebounds may continue, the 3,144-yuan level has yet to be effectively breached. Optimistically, once this level is broken, prices could rebound toward the 3,163–3,180-yuan range; however, if the breakout fails, prices will likely continue to fluctuate within last week’s trading range. From the perspective of the spot steel market: On the supply side, due to profit-and-loss impacts across different product categories, steel mills have shifted from strong to weaker capacity release, resulting in a slight decline in molten iron production, though output of specific products has varied. On the demand side, as the effects of the traditional off-season continue to intensify, end-user demand keeps weakening, leading to an overall decline in market transactions and gradually kicking off winter stockpiling speculation. On the cost side, with iron ore prices falling slightly and scrap steel and coking coal prices remaining stable, the support for production costs has shifted from resilient to weaker. Therefore, the Lange Steel Research Center forecasts that, under the combined influence of ongoing policy expectations, deepening off-season effects, shifting supply from strong to weak, comprehensive declines in transaction volumes, weakening cost support, and the onset of winter stockpiling speculation, China’s steel market will experience volatile rebounds this week.

Tang and Song: This week, northern regions continue to experience severe cold weather, while southern regions remain under persistent overcast and rainy conditions. Coupled with the approaching Spring Festival, construction sites have gradually begun shutting down, leading to near-stagnant demand for construction steels such as rebar and wire rod. Steel consumption in the manufacturing sector has shown relatively resilient performance, yet new orders remain limited, making it difficult to generate meaningful demand pull. End-user consumption has now genuinely entered the seasonal low-demand period. On the supply side, some regions have activated Level II emergency responses due to severe air pollution, implementing phased production restrictions; however, these measures have only a limited impact on national production capacity. Overall blast furnace operating rates and capacity utilization remain stable, with daily molten iron output staying around 2.28 million tons—significantly higher than the levels seen during the same periods in 2024 and 2025, reflecting strong resilience in long-process steel production. In the short-process segment, electric arc furnace steel plants continue to operate at low capacities, and some enterprises have already started their pre-Spring Festival maintenance periods ahead of schedule, further reducing the flexibility of construction steel supply. Overall, although actual effective supply has slightly contracted, overall supply remains relatively high. In terms of inventory, with supply failing to decline significantly while demand rapidly weakens, the steel supply-demand balance has shifted toward a looser market situation. Both social and steel mill inventories have entered a typical seasonal accumulation phase. It’s worth noting that this year’s winter stocking cycle has noticeably shortened, intensifying traders’ concentrated restocking activities, which have provided temporary support to spot prices. Meanwhile, blast furnaces maintaining high production levels have ensured robust demand for raw materials such as iron ore and coking coal. Combined with limited price concessions from overseas mines and narrowing profit margins for domestic coke producers, raw material prices are unlikely to fall sharply, providing relatively solid cost support for the steel industry. Recently, the Ministry of Finance clearly stated that “fiscal spending in 2026 will only increase, not decrease,” sending a strong signal of stabilizing economic growth. This policy stance is conducive to bolstering market confidence and lays a solid foundation for accelerating infrastructure investment and speeding up the issuance of special-purpose bonds in the coming period, thus providing important medium- and long-term macroeconomic “policy support.” In the short term, steel prices are under dual pressure from a “demand vacuum plus accumulating inventories,” resulting in insufficient upward momentum. However, looking at the medium to long term, three key factors—policy support expectations, cost-driven resilience, and concentrated winter stockpiling activities—are jointly establishing a floor for current prices. In the near term, steel prices are likely to continue fluctuating and adjusting. For rebar futures, watch for support around 3,100 yuan per ton in the lower range and resistance around 3,190 yuan per ton in the upper range.

Han Weidong: Recently, macro sentiment has been quite positive, with the stock market and Wenhua commodities rotating upward in their price movements—among them, black metals have remained relatively sluggish. From a fundamental perspective, steel prices are hovering near the lowest monthly average prices seen in 2024 (3,090) and 2025 (3,080). From a valuation standpoint, steel prices are comparatively low. Last October, during the peak season, the settlement price for threaded steel contracts was around 2,950; this January, during the off-season, the settlement price rose to about 3,165. The market hasn't fully priced in the fundamentals yet—it's instead placing greater emphasis on valuations. This year, since the Spring Festival holiday is more than half a month later than last year, year-on-year figures for production, demand, and inventories will likely be “misaligned” and “distorted.” Therefore, it’s crucial to analyze these data in conjunction with lunar calendar-based figures. Currently, given that spot prices remain at low levels and macro sentiment is favorable, the risk of further price declines is relatively limited. However, from a supply-and-demand perspective, there’s no clear sign yet of an imminent upward trend. Thus, the best strategy remains prudent operations—avoiding speculative bets on the market, focusing on capturing current-period profits, and patiently observing market developments.