China Rebar Prices Fall to Near Decade-Low as Steel Mill Profitability Drops to 32%
Claire Weston
China's rebar spot price has fallen for 49 consecutive trading days to ¥3,142 per tonne — the lowest since November 2016; only 32% of mills are still profitable as the property downturn drags the entire ferrous chain toward losses.
How far has rebar fallen, and why does it matter?
Rebar — the most common steel bar on construction sites — dropped to ¥3,142 per tonne on August 8, a near-decade low after 49 straight days of declines.
This means → rebar is the thermometer for property and infrastructure steel demand. A sustained slide signals real consumption at the construction site is shrinking.
Sabrin Chowdhury, head of commodities at BMI (Fitch's research arm), said bluntly: the property market remains deep in a slump, and July's Politburo meeting offered no boost to ferrous metals.
Why are inventories still climbing?
Mill rebar inventories reached 4.2 million tonnes by end-July, up 9% month-on-month — steel is piling up in warehouses unsold.
In plain terms = production hasn't slowed enough, consumption can't keep up, and the supply-demand gap is still widening.
Morgan Stanley expects China's residential sales to keep declining in Q3, making a near-term floor for construction-steel demand unlikely.
Can mills fix this by shifting capacity?
Macquarie strategist Florence Sun noted that mills have been redirecting capacity from rebar to other steel products, but the pace of adjustment clearly lags the speed of demand contraction.
Making it worse: rebar prices are falling while coking coal and coke costs are rising — margins have been narrowing continuously since late May.
This means → the pivot is directionally right, but turning a large ship takes time. The loss-making share is likely to widen in the short term.
How tough is it for steel mills right now?
Mysteel data: of 247 surveyed mills, the share still profitable fell for the fifth straight week to 32% — 36 percentage points lower than a year ago.
In plain terms = only 3 out of every 10 mills are making money; the other 7 are breaking even or losing.
Yet steel output ticked up this week — this reflects some mills still betting on a demand rebound rather than voluntarily cutting production.
What comes next?
China consumes roughly half of global steel output; property is the single largest source of demand.
This means → if the property downturn continues, rebar prices and mill profits cannot stabilize on their own.
The market's core focus: whether construction-end demand can find a floor in the near term — so far, no confirming signal has appeared.
Content is for reference only, not financial advice.