Posted on 30 Jan 2026

Chinese steel prices are expected to fluctuate in a narrow range in February, caught between weakening fundamentals in the ferrous market and an improving macroeconomic environment, Mysteel's chief analyst Wang Jianhua predicts in his latest monthly outlook.

Over the past month, the country's finished steel prices softened overall due to the waning steel demand from domestic downstream industries, Mysteel's survey showed.

During January 1-28, China's national composite steel price averaged Yuan 3,451/tonne ($496/t) including the 13% VAT, slightly lower by Yuan 8/t or 0.2% from the average price of the previous month, according to Mysteel's assessment.

In the coming month, steel demand nationwide will likely weaken further, as most steel end-users will close their businesses during the Chinese New Year (CNY) holiday over February 15-23, Wang noted. However, steel production may not retreat by much, as most blast furnace (BF) steelmakers will maintain steady production during the holiday, he predicts.

During the week of January 16-22 (three weeks ahead of the CNY holiday), total hot metal production among the 247 BF steel mills under Mysteel's tracking averaged 2.28 million tonnes/day, higher by 1.3% compared with the same period before last year's CNY holiday.

This may lead to a further accumulation of steel inventories in the market, thereby exerting downward pressure on steel prices, Wang warned.

By January 29, the total stocks of the five major carbon steel products held by steelmakers and trading houses across the 35 Chinese cities under Mysteel's monitoring stood at 12.8 million tonnes, significantly higher by 12.9% from the same period ahead of the previous CNY.

Nevertheless, prices of steelmaking raw materials are expected to stay relatively firm in February amid steelmakers' replenishment demand, providing some support for steel prices, according to Wang.

"Many steelmakers will continue to build their stocks of iron ore and coke in the first half of next month to make sure that they will have sufficient feed materials to maintain normal operations during the CNY holiday (when most traders will leave the market)," he explained.

By January 22, the total inventories of imported iron ore of all forms held by the 247 BF mills stood at 93.9 million tonnes, lower by 4.8% compared with the same period before last year's CNY holiday, according to Mysteel's tracking.

On the other hand, China's central and local governments have been actively formulating economic stimulus policies during the past month to ensure a positive start for this year's economy, Wang noted, adding that these policies benefit both individuals and businesses.

They include easing loan restrictions, stimulating consumption, lowering rates on monetary policy tools, and relaxing home buying curbs, he explained.

Although these policies may not be fully implemented in the immediate short term, they will contribute to an improvement in China's ferrous market sentiment, Wang predicts, and should help to underpin steel prices in the country, he suggests.

Source:Mysteel Global

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