In 2025, the steel market as a whole showed "strong supply and weak demand", with prominent supply - demand contradictions.
On the supply side, the annual crude steel output was 961 million tons, while the steel output was approximately 1.47 billion tons.
On the demand side, the apparent consumption of crude steel equivalent for the whole year was 829 million tons, a year - on - year decrease of 7.1%. This was the fifth consecutive year of decline in domestic steel demand. Exports became an important channel for diverting demand. In 2025, China's steel exports reached a new high of 119 million tons, an increase of 7.5% year - on - year, effectively relieving some of the domestic demand pressure.
Looking at the price trend, steel prices in 2025 showed a distinct "inverted N - shaped" fluctuation. Prices continued to decline with fluctuations in the first half of the year. By the end of June, the China Steel Price Index dropped to 89.51 points, reaching a new low since November 2016.
How to find a new balance point at the beginning of 2026?
1.Macroeconomic and policy environment
In the first quarter of 2026, the macro - environment featured "domestic support and external pressure". Domestically, fiscal and monetary policies worked in concert, focusing on supporting the "Three Major Projects" and infrastructure projects to stabilize domestic demand. The policy directions of "anti - involution" and building a unified national market have been clarified, but the specific implementation details have not been fully implemented, and their substantial stimulating effect on the market remains to be seen.The external environment is more complex. The global economic slowdown and trade uncertainties may restrict exports.The expectation of interest rate cuts in the United States has cooled down, and the timing of the first rate cut may be postponed to June. This change has affected global liquidity expectations. At the same time, international trade frictions have intensified. The European Union, the United States, India, etc. have recently adopted or launched new import - restriction measures and investigations. China's steel exports face various forms of trade barriers.
2.Supply - demand fundamentals
Entering the first quarter of 2026, the contradiction between supply and demand in the steel industry remains prominent, with obvious seasonal characteristics and structural differentiation.On the supply side, with the advancement of the carbon peaking and carbon neutrality goals, some high - energy - consuming and high - emission production capacities have been restricted, and the regulation policy for crude steel production is expected to continue. In terms of production capacity distribution, environmental protection - related production restrictions may lead to periodic fluctuations in supply in regions such as North China. At the same time, the proportion of electric arc furnace steel production capacity is expected to increase, which will enhance the flexibility of market regulation.On the demand side, a pattern of "real estate bottom - building, infrastructure taking over, and diversified supplementation" has emerged. The decline in real estate investment is expected to narrow, and the "Three Major Projects" have become key growth points, but their effect in offsetting the weak demand for traditional commercial housing is limited. Infrastructure investment is expected to maintain moderate growth, supported by water conservancy, transportation, and projects in the central and western regions. It is worth noting that the proportion of steel used in the manufacturing industry will continue to increase.Inventory has become an important source of pressure on the market in the first quarter. As of mid - January 2026, the steel inventory of key - statistical enterprises was at the highest level in the same period in nearly six years. High inventory not only ties up a large amount of enterprise funds but also suppresses the space and sustainability of price rebounds. Social inventory is expected to show a seasonal characteristic of "high at the beginning and low at the end", gradually returning to a reasonable range after inventory accumulation at the beginning of the year.
3.Analysis of Steel Price Trends
The support of the cost side for steel prices will show a differentiated characteristic in the first quarter, with different raw material varieties showing different trends.Looking at the main raw material varieties: The price of iron ore is expected to remain volatile under the suppression of increased supply; the price of coke will show a weak operating trend. Scrap steel is relatively firm, and after the festival, special attention should be paid to the boosting effect of raw material replenishment on the demand for scrap steel.The steel price in the first quarter will show a trend of "range - bound oscillation, low at the beginning and high at the end".Before the Spring Festival, the market will be supported by the phased replenishment demand, but high inventory will limit the height of the rebound. After the Spring Festival, with the warming of the weather and the improvement of construction conditions, coupled with the expectations of the Two Sessions, the demand is expected to gradually recover, and different varieties will show significant differentiation:Rebar: As a representative of construction steel, the price is expected to operate in the range of 3,000 - 3,250 yuan per ton. High inventory and weak real - estate demand are the main suppressing factors.
Hot - rolled coil: Benefiting from the demand of manufacturing industries such as automobiles and shipbuilding, its performance will be stronger than that of rebar, and the price spread between hot - rolled coil and rebar may continue to widen.Medium and heavy plates: Supported by the demand from machinery manufacturing and steel structures, the price is relatively firm.Pipe products: Seamless pipes perform well supported by investment in the energy sector; welded pipes are more closely related to construction demand and are more volatile.From the perspective of time nodes, in February, affected by the Spring Festival holiday, market demand enters the traditional off - season, and prices are under pressure. In the later stage of March, with the resumption of construction sites and the warming of macro - policy expectations, prices are expected to stabilize and rebound.
In summary, the steel market in the first quarter of 2026 starts under the situation of "high inventory, strong cost, and weak demand". Overall, steel prices will show a trend of "range - bound oscillation, low at the beginning and high at the end", with a significant differentiation of "strong flat products and weak long products" among varieties.For market participants, they need to maintain a cautiously optimistic attitude in the first quarter, control inventory levels, and pay close attention to the implementation rhythm of policies, changes in raw material prices, as well as the structural opportunities of "strong flat products and weak long products". Wait patiently for the opportunity of stabilization and recovery brought by the warming of demand and policy expectations after March.
