The domestic steel price index has dropped significantly, falling by 50 yuan/ton in just nine days, reaching 3,170 yuan/ton in a single week. This marks the lowest level since September 2006, signaling a major decline over the past eight years. Despite this sharp drop, current steel prices are not enough to halt the market’s momentum, and the path to recovery still faces considerable resistance. Analysts believe that steel prices may continue to bottom out in the coming period.
Looking at specific data, the average price of 25mm grade 3 rebar across 61 major markets nationwide was 3,319 yuan/ton last week, down by 14 yuan/ton compared to the previous week. In Hangzhou, East China, high-grade rebar was priced at 3,200 yuan/ton, a decrease of 10 yuan/ton. In Guangzhou, South China, rebar prices were reported at 3,390 yuan/ton, down 20 yuan/ton for the week. Meanwhile, in Chengdu, Southwest China, rebar prices reached 3,580 yuan/ton, marking a steep drop of 40 yuan/ton in just one week.
From the production perspective, according to the latest data from the China Iron and Steel Association, key steelmakers produced 1,767,300 tons of crude steel daily in late May, representing a 1.85% decrease from the previous period. This is the second time since December 2005 that the output of major steel companies has declined, indicating a slowdown in supply.
With steel prices continuing to fall and hitting multiple new lows, the pace of further declines has slowed significantly. Although current steel prices are historically low, the industry still faces severe funding challenges, with liquidity becoming a critical constraint in the domestic steel market.
Most steel mills remain cautiously optimistic about the off-season demand in June, though plant operating rates have slightly declined. Overall, market confidence is gradually stabilizing, and short-term steel prices are expected to stabilize rather than continue their downward trend. On a macro level, policy measures from decision-makers and potential loosening of monetary policies could provide some support. However, the current steel price is still not strong enough to drive a significant rebound, and the market may remain in a low-price range for an extended period.
Recently, steel prices have continued to fall, and with the arrival of summer and the rainy season in June, the steel market is entering its seasonal demand slowdown. It is expected that domestic steel prices will remain within a narrow range during this month, reflecting a more stable but still challenging market environment.
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