[Daily steel market report] [2025-9-1]

**Today's steel market price briefing**
**Sep 1, 2025**

1 Overall market performance: Both futures and cash fell sharply

On September 1, the domestic steel market suffered a "Black Monday", and the spot price fell significantly.

1.1 Futures market

Black futures contracts closed down across the board.

1.2 Spot market

Spot prices in major cities generally followed the decline of futures, ranging from 10-70 yuan/ton:

2 Analysis of influencing factors

2.1 Weakening of cost support: coke is raised and raw materials are falling

The first round of coke has been raised and landed: Coke has been raised for seven consecutive rounds, but on September 1, some steel mills (such as Ningxia Iron and Steel) issued a letter announcing that the purchase price of coke will be reduced from September 4, of which dry quenching coke will be reduced by 55 yuan/ton and wet quenching coke will be reduced by 50 yuan/ton. This indicates that steel mills' acceptance of raw material price increases has declined, and cost support has begun to loosen.

Double coke futures plummeted: The main contracts of coking coal and coke futures fell by 3.29% and 3.54% respectively, driving the bearish sentiment of the entire black system.

Iron ore arrivals increased: From August 25 to 31, the total arrival of iron ore in China's 45 ports was 25.26 million tons, an increase of 1.327 million tons month-on-month. Increased supply is also putting pressure on mineral prices.

2.2 Accumulation of supply and demand contradictions: high supply, weak demand, and rising inventory

Supply remains relatively high: Although the recent production restriction policy (such as the suspension of production by independent steel rolling enterprises from August 20 to September 6 in Tangshan, the sintering production limit of steel enterprises by 30-40% from August 26 to September 4, and the planned production limit of 30-50% from August 31 to September 3), the overall steel production decline is limited. Last week (August 25-31), the supply of the five major steel varieties was 8.8461 million tons, an increase of 65,500 tons week-on-week.

Weak demand performance:

The manufacturing PMI is still in the contraction range: the manufacturing PMI in August was 49.4%, up 0.1 percentage points from July, but it has been below the boom and bust line for four consecutive months, indicating that the recovery of the manufacturing industry is slow.

Slowdown in construction activity: The construction business activity index fell in August, down 1.5 percentage points from the previous month, and its new orders index fell to 40.6%, reflecting weak demand for construction steel.

Inventory continues to accumulate: Market demand is weak and supply is relatively stable, resulting in steel inventories continuing to accumulate. As of August 28, the inventory of billets of the same caliber in Tangshan's main warehouses and ports reached 1.3301 million tons, a new high for the year, with a week-on-week increase of 10.88%.

2.3 Lack of market confidence: capital withdrawal and pessimism

Futures market capital promotion: The new main 2601 contract of the futures snail increased its position downward, increasing its position by more than 170,000 lots on the same day, indicating that short funds are exerting downward pressure.

The spot market is wait-and-see: traders are less motivated to purchase, mostly wait-and-see, the overall market transaction is poor, and the terminal maintains just demand procurement. On September 1, the national construction steel trading volume totaled 89,310 tons, although it increased by 6.57% month-on-day, but the absolute level was still low.

3 Future market outlook: first suppressed and then raised?

For the market in September, market institutions believe that the month-on-month improvement in demand is a high probability event, but the improvement may not be as expected. It is expected that steel prices may show a trend of "first suppressing and then rising" in September.

Short-term (early September): The market may continue to fluctuate weakly, focusing on the quality of demand recovery and the actual implementation of the production restriction policy.

Medium-term (mid-to-late September): With the expected Fed rate cut and a series of important domestic meetings (such as the SCO summit) approaching, the market may switch to macro logic again, when steel prices may return to rise.

4 Summary and suggestions

The decline in the steel market on September 1 was the result of the combined effect of weakening cost support, accumulation of supply and demand contradictions, and lack of market confidence.

For traders, in the current market environment, it is particularly important to strengthen circulation and control inventory risks.

For end users, they can purchase on demand and pay attention to the opportunity to replenish inventory after the market overfalls.

For investors, they need to pay close attention to macro policy signals (especially real estate policy) in the next few weeks, real data on demand recovery, and changes in the intensity of steel mill production cuts.

Although the "Golden Nine" got off to a bad start, there is no need to be overly pessimistic. Although the demand in the traditional peak season may fall short of expectations, it will still rebound, and the market is still likely to rebound due to policy expectations.

Hopefully, the above analysis can help you better understand the steel market on September 1, 2025. Keep in mind that the market changes rapidly, and this analysis is based on current information only, so it's recommended to keep an eye on the latest market developments and authoritative reports.