China Steel Rebar Prices Fall as Mill Profitability Hits Multi-Year Low

China’s steel rebar futures fell toward CNY 3,060 per tonne, reaching a three-week low as worsening profitability across the country’s steel industry weighed on market sentiment. Industry data showed that only around 8% of Chinese steel mills were profitable, sharply lower than nearly 30% a week earlier and about 60% a year ago. The latest profitability level is reportedly the weakest since September 2024, with elevated coke prices continuing to squeeze steelmaking margins. China’s leading steel industry association has also encouraged producers to voluntarily reduce output in an effort to control inventories and improve profitability following a challenging first half of the year. However, significant production cuts may remain limited as steel demand shows signs of stabilizing. Mills could be reluctant to curb output aggressively if consumption improves in the coming weeks. Market participants are now watching China’s traditional September peak construction season, which could provide a seasonal boost to steel consumption. Any improvement in construction demand, production discipline or raw material costs could influence the direction of rebar prices in the near term.