Key Highlights

• Four-Month Low for Rebar Futures: Steel rebar futures fell below CNY 3,060 per ton, marking the lowest level in four months amid weakening demand and margin pressure.

• Mill Profitability Sharply Lower: Chinese steel mill profitability dropped to about 51%, down 4.8 percentage points week-on-week and 8.2 points year-on-year.

• Crude Steel Output Declining: China's May crude steel production fell 2.7% year-on-year to 84.35 million tons amid the ongoing property sector downturn.

Steel rebar futures fell below CNY 3,060 per ton, reaching their lowest level in four months as narrowing profit margins for steel mills and seasonal demand weakness weighed on prices across the Chinese steel market.

Industry data showed profitability among Chinese steel mills declined to about 51% in the latest week, down 4.8 percentage points from the previous week and 8.2 percentage points from a year earlier, reflecting a significant deterioration in mill economics.

The margin squeeze followed a fatal coal-mining accident in Shanxi last month, which drove up coke prices and encouraged mills to use more medium-to-high-grade iron ore to improve efficiency, adding to input cost pressures across the sector.

Meanwhile, crude steel production in the world's largest producer continued to weaken amid the prolonged downturn in the property sector, with May output falling 2.7% year-on-year to 84.35 million tons, underscoring the structural demand challenges facing Chinese steelmakers.

The combination of rising input costs, falling output, and weakening profitability paints a challenging picture for China's steel industry heading into the second half of 2026, with the property sector's prolonged weakness remaining the central structural headwind for the sector.

()