Multiple Positive Factors Boost Resilient Uptrend in Steel Market

Driven by a combination of factors including costs, supply and demand, and policies, the current steel market is characterized by rising costs, tightening supply, recovering demand, and fluctuating but strengthening prices.

On the cost side, geopolitical conflicts in the Middle East have driven a sharp rise in international oil prices, directly pushing up costs of electricity and fuel. Following the conclusion of China’s Two Sessions, expectations for a recovery in hot metal demand have strengthened, reinforcing market optimism over further raw material increases and rigidly lifting steel production costs. Major steel mills such as Baowu and Angang have successively announced their April price adjustment policies, with price increases for mainstream products sending clear bullish signals. Strong cost support has significantly weakened the pressure from high inventories on prices, lifting market bullish sentiment.

On the supply side, to ensure air quality during the Two Sessions, environmental inspections have been intensified in key regions including North China. Some steel mills have carried out temporary blast furnace maintenance either voluntarily or passively, leading to a decline in hot metal output. Despite the resumption of production at short-process enterprises, the overall increase in steel output remained limited, keeping the pressure of market circulation and deliveries manageable in the short term.

On the demand side, supported by cost factors and structural demand, price increases have diverged across steel products: plate and special steel for energy infrastructure have led gains, while traditional building materials have performed moderately due to the pace of domestic demand recovery, highlighting a structural market trend. With the full advancement of work resumption nationwide, infrastructure, manufacturing and energy projects have been launched intensively, steadily raising downstream operating rates and quickly reviving apparent steel consumption, shifting the supply-demand pattern toward a tight balance. Amid high inventories, steel prices have traded in a narrow range with a strengthening bias, showing relatively limited overall volatility.

According to the latest statistics from the China Iron and Steel Association (CISA), in late February 2026, major listed iron and steel enterprises produced 16.22 million tonnes of crude steel, with an average daily output of 2.027 million tonnes, down 0.1% month-on-month; pig iron output stood at 15.18 million tonnes, with an average daily output of 1.897 million tonnes, up 2.9% month-on-month; steel product output reached 16.89 million tonnes, with an average daily output of 2.111 million tonnes, up 11.0% month-on-month. Based on this, China’s estimated daily outputs in late February were 2.50 million tonnes for crude steel (down 0.1% month-on-month), 2.29 million tonnes for pig iron (up 2.9% month-on-month), and 4.10 million tonnes for steel products (up 3.0% month-on-month).

In late February 2026, steel inventories at major listed steel enterprises stood at 17.34 million tonnes, a decrease of 780,000 tonnes or 4.3% from the previous ten-day period. This represented an increase of 3.20 million tonnes or 22.6% from the start of the year, a rise of 2.63 million tonnes or 17.9% from the same period of last month, a gain of 1.03 million tonnes or 6.3% from the same period of last year, and a drop of 680,000 tonnes or 3.8% from the same period of the year before last.

On the export side, data from the General Administration of Customs showed that China exported a total of 15.591 million tonnes of steel products in January–February 2026, down 8.1% year-on-year. Affected by export licensing policies and the trade environment, direct steel exports faced short-term pressure. However, explosive growth in indirect downstream exports effectively offset the decline in direct exports, supporting the resilience of overall steel demand. Thanks to the optimization and upgrading of the demand structure, while demand for traditional building materials has weakened, demand for high-end manufacturing and infrastructure-supporting steel continues to strengthen.