FX.co ★ Steel Falls as China Output Declines

Steel rebar futures have slipped below CNY 3,120 per ton, retreating from their five-month high following official reports that China's steel production has decreased to a seven-year low in 2025. This decline comes despite robust export performance, underscoring subdued domestic demand. The annual production contracted by 4.4% to 961 million tons, marking its first dip below the 1 billion threshold since 2019. December's production also fell to a two-year low of 68.2 million tons. Concurrently, new home prices continued to decline in December, highlighting ongoing challenges within the property sector, the primary consumer of steel. Furthermore, the industry is grappling with increased government restrictions on new capacity as authorities in Beijing aim to control persistent overproduction. Nonetheless, a survey by the China Iron & Steel Association indicated that member mills increased their daily output to nearly 2 million tons in early January, although production remains 3.3% lower than the same period last year.