[Daily steel market report] [2025-10-8]

**Today's steel market price briefing**
**Oct 8th, 2025**

According to market data on October 8, 2025, the steel market on the first trading day after the holiday was generally stable, but pressure from the fundamental supply and demand situation still existed, and market sentiment remained cautious.

Key Focus

To understand the current market contradictions, attention should be paid to the following core driving factors:

- Supply and Demand Relationship: Pressure from inventory accumulation and high supply.The market is generally facing a 'weak supply and weak demand' situation, with relatively higher supply pressure.

- Supply Side: Blast furnace steel mill production is relatively stable, with few proactive production cuts. At the same time, due to falling scrap steel prices, electric furnace profits have recovered, increasing the willingness to resume production, keeping steel supply at a relatively high level.

- Inventory Side: During the National Day holiday, downstream demand was basically stagnant, while steel mills continued production, leading to inventory accumulation. For example, the total inventory of major market samples of hot-rolled strip nationwide increased compared to pre-holiday levels. Regarding construction steel, both mill and social inventories also showed varying degrees of increase.

- Demand Side: Post-holiday market transactions are gradually recovering, but overall trading remains weak. Rainfall across many regions in China has also affected the construction progress of end-user projects.

- Costs and Profits: Supported at the bottom, but profits are thin- Cost Support: Iron ore prices remained relatively firm during the holiday, providing a bottom support for steel prices.

- Steel Mill Profits: Profits per ton of certain steel products are already at low levels. For example, some data show that rebar gross margin per ton is poor, and some electric arc furnaces are even operating at a loss. This may limit further price cuts by steel mills.

- Macroeconomics and Policy: The interplay between expectations and reality

- Favorable Policies: Industrial policies such as the "Steel Industry Stable Growth Work Plan (2025-2026)" aim to optimize the supply-demand structure. Meanwhile, the commencement of some major projects may release additional steel demand in the future.

- External Environment: Expectations of a Federal Reserve rate cut and China's increased steel exports to Southeast Asia and Africa have partially improved macro sentiment and alleviated domestic supply pressure. However, it should be noted that the European Union's proposed reduction of steel import quotas and additional tariffs, as well as the U.S. imposition of tariffs on heavy trucks, create some uncertainty in international trade.

- Market Sentiment: Mainly cautious and observant- Post-Holiday Mindset: Due to weak performance in the futures market before the holiday, market participants were not eager to stockpile, leading most traders to adopt a wait-and-see attitude. High inventory is one of the main factors restricting current market confidence.

- Capital Movement: Ahead of the holiday, there was strong risk aversion in the futures market, and long positions were rapidly reduced.

Summary and Outlook

Overall, on October 8, 2025, the steel market is balancing among high supply, high inventory, cost support, and policy expectations.

- Short-term Outlook: Inventory pressure is becoming apparent post-holiday. If demand does not quickly and effectively follow, steel prices may continue to weaken and fluctuate. However, considering cost support and thin profits, the likelihood of a deep price drop is small.

- Medium to Long-term Perspective: The industry is seeking a new balance amid capacity clearance and green transition. Going forward, attention should be focused on the speed of inventory reduction and the specific implementation of policies.

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