Steel Firms Up on Improving Margins

Steel rebar futures traded near CNY 3,100 per ton, finding support as falling spot coke prices helped reduce steelmakers’ losses, improving the sector’s outlook and potentially easing pressure to cut production. Meanwhile, China intensified efforts to support its economy amid weak consumption and investment, allocating CNY 550 billion ($82 billion) in unused government debt quotas to strengthen local government finances and expand infrastructure spending. However, the steel industry continued to face subdued demand amid a prolonged property market downturn and sluggish construction activity. Recent data showed that only 6.9% of Chinese steelmakers were profitable at the end of September, highlighting persistent challenges across the sector. Steel producers remain under pressure to curb output as shrinking profit margins and uncertain demand continue to weigh on prices.