FX.co ★ Steel Holds Steady as China Targets Overcapacity

Steel rebar futures traded steadily above CNY 3,070 per ton, hovering near one-month highs after China reiterated its pledge to curb overcapacity in the steel industry in an effort to improve the sector’s overall health. Chinese steel mills continue to face pressure from persistent oversupply amid a protracted property downturn, while exports are increasingly constrained by protectionist measures in key overseas markets. Beijing issued similar commitments during the 2025 policy meetings, though the outcomes were mixed. China’s steel production dropped below 1 billion tons last year for the first time since 2019, although some analysts have questioned the reliability of the official data. The country also set a 2026 GDP growth target of 4.5%–5%, its lowest since the early 1990s, as policymakers grapple with ongoing deflationary pressures and higher US tariffs.