Steel Pressured by Weak Fundamentals

Steel rebar futures remained below CNY 3,100 per ton, staying under pressure as weak market fundamentals continued to weigh on prices. Elevated coke prices continued to squeeze steelmakers’ profit margins, prompting some producers to scale back operations and undergo maintenance. Industry data showed that steel mill profitability in China fell sharply to 7.79% in the latest week. Chinese steel demand also weakened further in the third quarter amid a continued slowdown in construction activity. Data showed that China’s new home prices extended their declines in August, highlighting the persistent drag from the country’s prolonged property downturn. Meanwhile, China’s leading industry association reportedly urged steelmakers last month to voluntarily reduce output, aiming to lower inventories and restore profitability following a challenging first half.