Steel rebar futures declined toward CNY 3,060 per ton, marking a three-week low, as deteriorating profitability across China’s steel sector pressured market sentiment. Industry data indicated that only about 8% of Chinese mills were operating profitably, down from roughly 30% a week earlier and 60% a year ago. This was the weakest level since September 2024, with persistently high coke prices continuing to squeeze margins.
In response, China’s leading industry association reportedly urged steelmakers last month to voluntarily reduce output to help draw down inventories and restore profitability after a difficult first half of the year. However, analysts note that mills appear reluctant to implement significant production cuts, particularly as steel demand shows signs of stabilizing. Despite soft underlying fundamentals, investors still expect a seasonal uptick in consumption during September’s peak construction period.
