[Daily steel market report] [2025-8-20]

**Today's steel market price briefing**
**August 20, 2025**

On August 20, 2025, China's steel market continued to show a weak trading trend, but compared with the previous trading days, the market showed some resilience, and the decline converged.
Futures Market: 

Black futures closed lower as a whole but recovered to a low level in the afternoon. the main rebar contract (RB2501) closed at 3132 yuan/tonne, down 0.38%; The main hot coil contract (HC2501) closed at 3402 yuan/tonne, down 0.61%. Coke and coking coal fell to a relative extent, both exceeding 2%.

Spot Market: 

The average price of Grade 3 seismic rebar in 31 major cities across the country was reported at 3338 yuan/tonne, down 9 yuan/tonne from the previous trading day. The average price of 4.75mm hot-rolled coil in 24 major cities in the country was 3477 yuan/ton, 17 yuan less than the previous trading day.

Market sentiment: The overall bias is cautious, with traders mostly entering and exiting fast, sending and depreciating. In the afternoon, with the bottom of the snail rising, the spot price in some markets recovered from a low level and the transaction improved slightly.

2 Analysis of influencing factors 

2.1 Bearish factors 

Demand remains weak: High temperatures and rainy weather and real estate recessions continue to weigh on downstream demand, especially for construction steel. The trading volume of construction steel from 237 traders across the country was slow. Inventory continues to accumulate: The national steel social inventory and steel mill inventory continue to increase, especially the pressure on rebar inventory. External environmental challenges: The U.S. policy of imposing a 50% tariff on 407 categories of steel and aluminum derivatives will officially take effect, which will have limited direct impact but will affect market sentiment.

Deflection effect: China's stock market performance was strong, with the Shanghai Composite Index hitting a 10-year high, which may have attracted some venture capital flows from commodity markets (including black) to equities.

2.2 Supporting factors

Cost support remains: Despite the easing, crude fuel prices remain generally relatively high. Coke has completed the seventh round of increase, and the supply of steel scrap is not loose, causing steel mills to have little profit or even loss, and the cost has some support for steel prices.

Expectations of the production restriction policy: In the northern region, especially in Tangshan, some steel mills have received notices of production restriction1. Although the market generally believes that the current production constraints are less than expected, their potential impact on the supply side is still seen as a positive factor for the future.

Market Oversold Rebound Demand: After the continued decline in the price of rebar and other varieties, the market believes that there is an oversold component and there is a need for a rebound technical repair.

High Season Expectations: The traditional "Gold Sep and Silver Oct" peak season is approaching, and the market is still waiting for demand to recover after the weather improves in September.

3 Aftermarket outlook Overall:

 for the aftermarket: Short-term (1-2 weeks): Steel prices are expected to fluctuate weakly. At present, the fundamentals of supply and demand in the market are weak and there is a lack of strong bullish momentum. However, due to cost support and market expectations about future peak season demand and production constraints, prices are unlikely to continue to fall sharply and deeply. Once the transaction of low-priced resources improves, the pressure on supply and demand in the steel market is expected to ease.

Medium term (1 month): Pay attention to the actual realization of demand during the peak season of "Golden Nine" and the actual implementation of the production restriction policy in the north. If demand can recover as expected, with supply-side suppression due to production constraints, steel prices are expected to stop falling and recover. Conversely, if demand falls short of expectations and inventory removal is slow, steel prices will remain under pressure.