Forecast: Collapse! Will Steel Prices Fall Further?

Just when it was said that the decline towards the end of the range was not far off, today it has already come to pass. After breaking through the support at the bottom of the 3310 range, the price moved down smoothly. Has it fallen to an appropriate level? How will the market behave tomorrow?

I.  Factors Influencing the Steel Market

1. New Home Sales in 10 Major Cities Decline by 26.4% Year-on-Year
From February 3rd to February 9th, the total sales area of newly built commercial housing in 10 key cities was 584,000 square meters, a decrease of 66.2% compared to the pre-holiday period and a decrease of 26.4% year-on-year. The total sales area of second-hand homes was 896,900 square meters, a decrease of 54.3% compared to the pre-holiday period but an increase of 62.7% year-on-year. (China Steel Network)

2. U.S. President Imposes 25% Tariff on All Steel and Aluminum Imports
On the 10th, local time, the U.S. President signed an executive order announcing a 25% tariff on all steel and aluminum imports to the United States, effective March 4th. Additionally, the latest measures also cancel tax-free quotas and exemption policies for steel and aluminum from some trading partners, prompting strong responses from multiple European countries. (Caixin)

3. Operating Hours of Komatsu Excavators in China Fell by 17.2%Year-on-Year in January
Data shows that in January 2025, the operating hours of Komatsu excavators in China were 66.2 hours, a decrease of 17.2% year-on-year and 38.7% month-on-month. (Sina Finance)

II. Spot Market Aspects

Rebar Today: Slight Decline
Affected by the U.S. tariff policy, market sentiment is poor. Some businesses have offered discounts to ship goods. Downstream construction has not yet commenced in earnest, with only a few engaging in early stockpiling and speculative trading. Rebar prices are expected to remain stable with individual declines tomorrow.

Hot-Rolled Coil Today: Slight Decline
Terminal demand has recovered somewhat, but steel inventories continue to accumulate. Coupled with the impact of tariffs, downstream buyers remain cautious, leading to poor inventory transfer. Hot-rolled coil prices are expected to remain stable with individual declines tomorrow.

Medium Plate Today: Stable with Individual Declines
Downstream enterprises are resuming work slowly, and market procurement demand has not yet kicked off. The spot market is mainly in a wait-and-see mode. However, low-priced transactions in most areas are acceptable, and prices are mainly stable with a weakening trend. Medium plate prices are expected to remain stable with individual declines tomorrow.

Strip Steel Today: Slight Decline
Steel production remains steady, but downstream order intake is generally weak, and proactive procurement enthusiasm is low. Social inventories continue to increase. Coupled with a breakdown in trading, market enthusiasm has weakened. Strip steel prices are expected to remain stable with individual declines tomorrow.

Section Steel Today: Slight Decline
Downstream construction sites have not yet commenced work in earnest, and downstream demand is limited. Traders have not replenished their inventories, and shipments remain sluggish. Inventory levels have not changed much compared to before the holiday. Coupled with a decline in raw material costs, section steel prices are expected to remain stable with individual declines tomorrow.

Pipe Today: Stable with Individual Declines
Downstream resumption of work is slow, and demand-side momentum is insufficient. Additionally, the impact of tariffs on the macroeconomic environment has led to a decline in the black metals sector, further affecting market confidence in the pipe market. Pipe prices are expected to remain stable with individual declines tomorrow.

III. Raw Material Market Aspects

Steel Billet Today: Slight Decline
The eighth round of coke price reductions has taken effect, coupled with weakening iron ore prices. Raw material costs have declined, and downstream shipments are sluggish. Direct sales of steel billets have weakened. Steel billet prices are expected to trend weaker tomorrow.

Iron Ore Today: Stable with Weakness
Market transactions during the session were weak, and speculative demand was low. Currently, arrivals are in a recovery stage, and short-term pressure is not high. However, poor inventory reduction at steel plants has led to a synchronous decrease in demand for iron ore replenishment. Iron ore prices are expected to remain stable with weakness tomorrow.

Coke Today: Stable Operation
Steel transactions are poor, and inventory transfer is sluggish. Steel plant inventories are high, and demand for coke has weakened. Coupled with a decline in raw material coal prices, coke cost support is no longer present. Coke prices are expected to remain stable tomorrow.

Scrap Steel Today: Mixed Trends
Steel plants continue to replenish their inventories, but finished steel prices have weakened significantly, and profits have shrunk. Coupled with a synchronous decrease in the price difference between iron and scrap steel, steel plants’ willingness to increase scrap steel procurement prices has declined. As scrap steel traders resume work, the market is tending towards a balance between supply and demand. Scrap steel prices are expected to remain stable with individual declines tomorrow.