China's Steel Price Trend Since Early July 2026
Steel prices have gone through a bumpy, weak cycle ever since July started this year. There's no sharp crash or crazy rally; instead, the market has hovered at low levels, swinging slightly up and down each day, trapped between slow demand and rising production costs. I will break down this price movement in plain words, talk about what pushed prices down at first, what stopped them from falling too far, and the small rebound we've seen in mid-July. This piece uses simple language without complex industry jargon, just like chatting about daily market news.
From July 1 to the first ten days of the month, almost all steel types kept slipping slowly. Rebar, the most common steel used in residential and commercial building foundations, took the biggest hit. At the very start of July, spot rebar prices sat around 3,080 RMB per ton, and within just one week, they dropped down to roughly 3,060 RMB per ton. Hot rolled coils, widely used for making corrugated galvanized sheets, vehicle frames and factory metal walls, followed the same downward path. Early July hot coil prices fell nearly 30 RMB a ton week-on-week, as local sellers cut their asking prices to clear piled-up stock in warehouses.
The main reason for this early July price drop is the traditional low season for construction. Across most parts of China, July brings non-stop high temperatures and frequent heavy rainstorms. Outdoor construction sites cannot work for long hours each day, and many small construction teams even pause projects temporarily to avoid extreme weather. With fewer building projects placing bulk orders, steel buyers only purchase small amounts "as they need", refusing to stock up large inventories ahead of time. Low trading volume made market confidence weak, so steel mills and wholesalers had no choice but to lower prices to attract buyers.
Another big pressure point was the oversupply of steel. Even with weaker demand in early July, many steel factories kept running full production lines at first. Their output stayed high, and steel inventories stored in factories and urban trading markets kept building up week by week. Traders worried that if they held too much steel stock through the slow season, they would face bigger losses if prices kept sliding, so more people chose to sell their stored steel at discounted rates, dragging overall market prices lower together.
Surprisingly, steel prices never tumbled to extremely low levels in early July, and that's all thanks to raw material costs acting as a solid bottom support. Two key raw materials for steel production-iron ore and coke-stayed expensive through the first half of July. Coke prices even saw ten straight rounds of price increases, lifting the basic manufacturing cost for every ton of finished steel. Iron ore spot prices also bounced back slightly after a short dip, staying steady between 720 and 740 RMB per wet ton in early July. Steel mills already lost money on each ton of steel they sold; by mid-July, blast furnace rebar production had a cash loss of nearly 100 RMB per ton. Factories could not afford to slash steel prices further, or their losses would spiral out of control, which created a natural floor stopping prices from free-falling.
Starting around July 14 to 16, the whole steel market showed obvious signs of stabilization and a mild small rebound, changing the one-way downward trend we saw earlier in the month. Rebar futures on the Shanghai Futures Exchange climbed over 40 RMB per ton in just two days, and spot hot rolled coil prices also edged up about 10 RMB per ton across major cities. This slight recovery came from three clear shifts in the market.
First, more steel factories finally started to cut production or schedule maintenance shutdowns to fix the supply-demand imbalance. Running factories at a loss was unsustainable, so dozens of blast furnaces and electric arc furnaces paused operation in mid-July. Weekly national steel output dropped by more than 200,000 tons, which gradually eased the heavy inventory pressure that weighed on prices for weeks. As stockpiles stopped growing and slowly shrank, traders felt less panic about rushing to sell cheaply, lifting market sentiment a little.
Second, positive macroeconomic news warmed up investor mood. Market participants expected supportive growth policies to be released soon, which made people hopeful that construction and manufacturing demand would pick up in the coming months. At the same time, the US dollar weakened slightly, pushing up global commodity sentiment, and overseas buyers placed a small number of new export orders for Chinese steel billets and coils, adding tiny extra demand to the domestic market.
Third, raw material costs kept their firm upward trend, reinforcing the cost support for finished steel. With iron ore and coke not getting cheaper, steel mills refused to offer low-price goods anymore, and many large steel companies even announced minor price hikes for their August delivery products, guiding the whole market to stop chasing lower prices.
Even though steel prices ticked up a little in mid-July, no one in the industry expects a strong, lasting rally anytime soon. The core issue of weak seasonal demand still hasn't gone away. High heat and rainy weather will continue to limit construction activity through the rest of July, and downstream factories will not make massive bulk purchases until the peak construction season arrives in September and October. While reduced steel output and stable raw material costs will stop prices from falling sharply again, limited buyer activity will cap any large price increases, leaving the market stuck in narrow range-bound fluctuations for the rest of July.
To wrap up the full July price trend in simple terms: the month opened with slow, steady price drops driven by low construction demand and excess steel supply, raw material costs prevented a severe price collapse, and mid-July brought a gentle rebound as steel mills cut production and market sentiment improved. Anyone buying or selling steel this month has to keep a close eye on three key factors: daily construction site activity, steel factory production reduction plans, and changes in iron ore and coke prices. These three elements will continue to control every small swing of China's steel prices for the rest of July.
