China weekly: Steel prices edge up w-o-w despite weak demand, raw material prices remain mixed

• • Iron ore prices fall on weak steel market fundamentals

• • Steel inventories increase by 25% y-o-y in mid-Jan’26

China’s steel prices edged up in the week ended 30 January even as demand remained weak. However, raw material price trends were mixed, with iron ore prices recording a slight decline, billet prices remaining stable, and metallurgical coal prices rising marginally.

The China Iron and Steel Association (CISA) has reported that total steel inventory at key Chinese enterprises stood at 16.13 million tonnes (mnt) in mid-January 2026 (11-20 January), up by 1.09 mnt or 7.3% compared to 15.04 mnt in early-January. Moreover, on m-o-m basis, inventory levels increased by 120,000 tonnes (t) or 0.8% m-o-m from 16.01 mnt in mid-December 2025. Furthermore, inventories rose by 3.2 mnt or 24.7% y-o-y against 12.93 mnt a year ago.

1. Iron ore spot prices decline w-o-w: Iron ore fines (Fe 61%) benchmark prices fell by $2/dmt w-o-w to $103/dmt CFR China on 30 January as weak downstream steel fundamentals continued to weigh on sentiment. The softer trend attracted buying interest, with mills taking advantage of the dip to replenish stocks. With more blast furnaces restarting, mills are expected to step in for final restocking before the Lunar New Year.w

a) Spot pellet premium stable w-o-w: The spot pellet premium for Fe 65% grade pellets held firm at $18.3/t CFR China on 28 January.

b) Spot lump premium steady w-o-w: The spot lump premium edge remained largely stable w-o-w at $0.046/dmtu on 30 January.

2. Chinese domestic met coke prices to strengthen in short term: Chinese domestic coking coal market remained largely stable with a mild upward bias on 29 January, as steady mine output, low plant inventories, and improving steel mill margins supported prices, despite weak seasonal demand, easing procurement, and logistical constraints, with the first round of met coke price hikes widely expected to be implemented imminently.

In contrast, Australian PHCC prices edged up by $1/t to $251/t FOB, while BigMints PHCC index for Paradip, India, also increased by $1/t to $265/t on 30 January 2026, supported by firmer seaborne sentiment.

3. China’s billet prices remain stable despite weak winter demand: Chinese billet prices remained stable w-o-w on 30 December at RMB 2,940/t ($423/t). Prices moved within a narrow RMB 20/t ($3/t) range, supported intermittently by firmer iron ore prices and expectations of post-holiday restocking. However, upside was capped by weak winter construction demand, ample inventories, and cautious buying ahead of the Lunar New Year.

SHFE rebar futures improved by RMB 20/t ($3/t) from RMB 3,092/t ($445/t) to RMB 3,112/t ($448/t). Futures strength was underpinned by higher raw material costs and expectations of stronger spring demand, although gains remained volatile as spot market demand stayed muted and buyers booked cautiously.

Overall, market sentiment remained cautious but stable. Cost-side support and post-holiday demand expectations provided an underlying floor, but near-term fundamentals, including subdued spot activity, pre-holiday uncertainty, and slow construction activity, continued to limit upside across both billet and rebar markets.

4. Domestic HRC prices inch up w-o-w: Domestic HRC prices in China inched up by RMB 10/t ($1/t) w-o-w to RMB 3,080/t ($443/t) on 30 January from RMB 3,070/t ($442/t) on 23 January 202. SHFE HRC futures (May 2026 contract) remained largely stable w-o-w at around RMB 3,302/t ($475/t) on 30 January. Moreover, China’s HRC export offers remained unchanged w-o-w at $470/t FOB on 30 January. Overall, market sentiment remained subdued amid weak demand ahead of the Lunar New Year holiday slowdown.

5. Rebar prices rise w-o-w: China’s rebar prices edged up w-o-w by RMB 10/t ($1/t) w-o-w to RMB 3,170/t ($456/t) on 30 January from RMB 3,160 ($455/t) a week earlier, tracking gains in SHFE futures. The SHFE futures (May 2026 contract) increased by RMB 13/t ($2/t) w-o-w to RMB 3,147/t ($453/t) on 30 January from RMB 3,134/t ($451/t) on 23 January 2026. However, overall demand remained weak amid the ongoing seasonal slowdown in the region.

Outlook:

China’s steel market is expected to remain under pressure in the coming week ahead of the Lunar New Year holidays, with trading activity likely to remain slow. Weak demand continues to weigh on the market, and any price recovery will depend on improvements in downstream buying, with clearer market direction emerging as demand trends become more visible.