Steel prices have remained weak, continuing the downward trend seen in the previous period. The domestic steel market has witnessed a persistent decline, driven by falling steel prices and ongoing reductions in billet prices, which have not led to improved transaction volumes. Merchants have maintained stable pricing, particularly for medium and small-sized products. As of September 30, the price of HRB400 20mm rebar in the Shanghai market stood at 3,440 yuan per ton, marking a decrease of about 90 yuan per ton since the start of September.
Steel mill price adjustments have been significant, with construction steel manufacturers like Yindie experiencing sharp declines in market prices during September. Although ex-factory prices generally remained steady in early September, especially at major mills such as Shagang and Yonggang, they saw a reduction of 30 yuan per ton in mid-September. Contract replenishment was also adjusted, with a range of 30–60 yuan per ton. By late September, these reductions accelerated further, with Shagang, Dagang, and Yonggang lowering their rebar and wire rod ex-factory prices by 50–80 yuan per ton. The latest ex-factory price for HRB400 20mm rebar at Shagang is now 3,580 yuan per ton, while the Shanghai market price is approximately 130–150 yuan lower than that.
Despite the steel plants' strong pricing power, they have been forced to follow market trends and reduce prices in response to weak demand. This indicates that even with control over pricing, the industry remains under pressure from declining demand and oversupply.
In terms of production, steel mills have continued to operate at high levels, but with reduced intensity. In August, the average daily crude steel output reached 2.3181 million tons, up 1.24% from the previous period, ending three consecutive months of decline. According to the China Iron and Steel Association, the average daily crude steel output in September and mid-September was estimated at 212.94 and 21.435 million tons, respectively, showing increases of 0.48% and 0.66%. Overall, steel production remains robust, and supply pressures are expected to grow throughout the year, with estimates suggesting an increase of around 8% compared to the same period last year.
Regarding inventory, on September 27, the social inventories of rebar and wire rods were 5.9803 million and 1.907 million tons, respectively, down 45% and 58% from the yearly highs in March. These figures are roughly flat compared to the same period last year, although the weekly decline has narrowed significantly. At the end of September, the inventory of key steel companies rose slightly by 5.0%, reaching 13.22 million tons. After six months of destocking, steel stocks only began to rise again during the traditional peak demand season, indicating weaker-than-expected consumption and eroded market confidence.
Looking at downstream demand, it has grown steadily, but not as fast as supply-side growth. According to the National Bureau of Statistics, real estate development investment in August reached 781.8 billion yuan, up 13.09% year-on-year, though only slightly higher than the previous month's 4.61% increase. Among the sub-items, only the sales area showed positive year-on-year and quarter-on-quarter growth, at 10.06% and 0.09%, respectively. Other metrics, including newly started and construction areas, declined sharply, with year-on-year growth rates dropping to 20.14% and 24.82%, respectively—both record lows for the year. From January to August, the cumulative growth rate of real estate development investment was 19.3%, dipping below 20% for the first time this year.
In August, the national real estate development climate index stood at 97.29, a slight decrease of 0.1 points from the previous month. Regarding funding, real estate development investment from January to August reached 769.6 billion yuan, representing a year-on-year growth of 28.9%, a drop of 2.6 percentage points from the previous month.
However, real estate risks are expected to remain limited in the fourth quarter, and investment growth may slow down. With new housing inventory currently at around 11 months—slightly below the historical average—the arrival of the "Golden September" and "Silver October" periods should help maintain relatively good sales performance. The low start of new construction projects suggests that supply will remain constrained, and inventory is likely to continue decreasing.
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