Price trends

According to price monitoring by SunSirs, prices for wire rods and rebar initially dipped but subsequently rebounded in August, with the overall price level edging up slightly. By the end of the month, the average price of HRB400 rebar in the Jiangsu-Zhejiang-Shanghai region stood at 3,159.66 RMB/ton, up 4.61% from the beginning of the month; the average price of HPB300 high-speed wire rod was 3,375 RMB/ton, an increase of 3.29% over the same period.

According to the commodity market analysis system of SunSirs, the domestic construction steel market in August 2026 exhibited a trend of "initial decline followed by a rebound and recovery from low levels"; while the price center shifted slightly upward compared to July, overall price levels remained relatively low for this time of year. 

In terms of the monthly trend, the month can be broadly divided into two phases. The first phase—spanning from the beginning of the month to mid-month (August 1-14)—was characterized by narrow-range fluctuations and a continuation of a state of weak equilibrium. At the start of the month, the market remained sluggish, a trend persisting from July; high temperatures hampered on-site construction, downstream buyers limited their purchasing to essential needs, and spot price volatility was extremely limited. As of August 14, the average price of HRB400 rebar in the Jiangsu-Zhejiang-Shanghai region stood at approximately 3,022 RMB/ton, a slight week-on-week decline of 0.23%, while the average price of HPB300 high-speed wire rod was 3,262.5 RMB/ton, down 0.46% week-on-week. Overall, the market exhibited a pattern of "weakness on both the supply and demand sides."

Late August (August 17-30): Cost-driven price rebound. Market sentiment shifted noticeably as the month drew to a close. On the supply side, coking coal supplies tightened due to strict safety inspections and low customs clearance volumes for Mongolian coal, driving up prices; the first round of coke price hikes was successfully implemented, significantly strengthening cost support for steel products. On the demand side, as hot and rainy weather subsided, expectations for the traditional "Golden September" peak construction season grew, releasing demand for both futures-spot arbitrage and speculation. Spot rebar prices rebounded sharply on August 17, rising 1.85% in a single day to 3,078 RMB/ton. By August 28, the national average price for Grade III rebar had recovered to 3,126 RMB/ton—an increase of over 100 RMB/ton from the mid-month low—while the average price for high-speed wire rod stood at 3,316 RMB/ton; the combination of cost support and supply contraction drove the overall price level upward.

Factors affecting price

According to data from SunSirs, both the weekly production and total inventory of wire rods and rebar declined in August.

On the supply side, steel output underwent a voluntary contraction in August. With the industry-wide scope of losses widening (affecting approximately 60% of steel enterprises) and profit margins under downward pressure, integrated steel mills diverted molten iron production toward flat steel products, while short-process electric arc furnace (EAF) mills maintained low operating rates due to losses incurred at standard electricity rates (approximately -192 yuan per tonne). Specifically, weekly rebar output dropped to around 1.8 million tonnes—a significant decline compared to the previous period—while the overall output of construction steel fell by 15.68% year-on-year. Steel mills achieved notable success in inventory reduction; mill-level rebar inventories declined continuously, effectively alleviating supply-side pressure.

Regarding inventory, the structure of steel stocks continued to improve this month, driven by the combined effects of supply contraction and a marginal recovery in demand. By the end of August, both social inventories and mill inventories of major steel products were trending downward; notably, the reduction in rebar inventory was significant, with social stocks falling to around 5.05 million tonnes and mill stocks to approximately 1.78 million tonnes. However, it is important to note that overall inventory levels remain high compared to the same period last year (social rebar inventory is up by approximately 7% year-on-year), and the inventory-to-sales ratio remains at a historical high for this time of year—factors that are constraining the upside potential of steel prices.

On the demand side, as temperatures across the country eased in late August and construction conditions improved, end-user procurement demand saw a slow recovery. Apparent consumption of rebar rebounded to around 1.96 million tonnes per week, marking a slight month-on-month increase. However, it is worth noting that the recovery remains weak: real estate investment and new construction starts continue to decline, and the pace at which infrastructure funding translates into actual physical work remains sluggish; end-users are primarily purchasing on an as-needed basis, while speculative demand is driven largely by sentiment in the futures market. Wire rod has shown greater price resilience compared to rebar, bolstered by robust exports (with automobile exports up 57.49% year-on-year in July).

Regarding costs: There is strong support from the cost side. The tight supply of coking coal is unlikely to ease in the short term, and expectations for a third round of coke price hikes have already emerged. Although iron ore prices have fluctuated, underlying demand remains robust, ensuring solid cost-based support for steel prices.

August Market Outlook:

Inventory and Export Uncertainties: Social inventory levels, which remain high year-on-year, require sufficiently strong demand to be absorbed; if the pace of inventory reduction during the peak season falls short of expectations, market sentiment will be dampened. Meanwhile, escalating trade barriers from regions such as the EU and Japan are creating uncertainty for both direct steel exports and indirect exports (e.g., machinery and home appliances).

On the demand side: Seasonal recovery—as high temperatures subside, East and South China will enter the year's prime period for construction; consequently, there is potential for a month-on-month recovery in steel demand for infrastructure projects, particularly those backed by special-purpose bond funding.

On the supply side: Continued supply constraints—with steel mill profit margins currently slim, there is a strong inclination to voluntarily cut production or maintain low output levels; it is anticipated that the pace of recovery for molten iron and rebar production in early September will lag behind the recovery in demand, keeping supply-side pressure manageable.

Market Outlook:

In summary, analysts at SunSirs anticipate that the construction steel market in September will be characterized by a tug-of-war between strong cost support and limited improvement in actual market conditions. Spot prices for rebar are projected to trade primarily within the 3,050-3,250 RMB/ton range, while wire rod prices are expected to range between 3,250 and 3,450 RMB/ton. Market participants are advised to closely monitor the pace of steel mill production resumption, the issuance of special-purpose bonds and the actual implementation of infrastructure projects, as well as the rate of steel inventory depletion. Regarding trading strategy, maintaining low inventory levels and engaging in swing trading is recommended, while remaining vigilant against the risk of prices surging and then falling back should peak-season demand fail to meet expectations.

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