Steel rebar futures remained firm above CNY 3,130 per ton, trading near a six-week high after data showed that Chinese steel output fell 3.6% to around 160 million tons in the first two months of the year, as mills cut production in response to weak demand. The period is also typically a seasonal lull for steelmakers, due to the Lunar New Year holiday and pollution controls imposed ahead of the annual legislative meetings in March.
China’s steel industry has entered a structural downturn as the broader economy matures, resulting in slower construction activity, a trend exacerbated by the prolonged property sector crisis. Earlier this month, economic planners at the National People's Congress signaled intentions to implement orderly reductions in steel capacity. Beijing issued similar commitments during the 2025 policy meetings, though the outcomes were mixed.
China’s steel output dropped below 1 billion tons last year for the first time since 2019, although some analysts have questioned the accuracy of the official data.
