Last Updated: January 29, 2026 – Includes latest Q1 data from China Iron and Steel Association (CISA)
China is experiencing critical restructuring of the steel industry, and the trend in 2026 steel prices has become a key issue for world industrial chains and financial markets to stay focused upon. It’s time for the steel industry to retreat from its era of massive growth, facing the challenges of carbon neutrality, resizing the supply-demand balance, and high-quality development among other constraints. Analytic opinion from leading academic organizations and experts finds 2026 Chinese steel prices to see a small bounce back with limited upside in price with range-bound volatility behavior, characterized by “capped upside and supported downside” and pronounced structural divergences. Weak supply-demand dynamics lead to modest price rebound The key factor behind 2026 prices for steel is the gradual easing of the oversupply pressure, but the fundamental contradiction will not be fully resolved.
On the demand side, overall consumption is set for a mild contraction, as well as drastic structural changes. China’s steel demand will be 800 million tons by 2026, a 1.0% reduction from the previous year, according to forecasts from Metallurgical Industry Planning and Research Institute (MIPRI). This small decline hides a “two-tiered” scenario across sectors: Growth engines are focused in upscale manufacturing sectors. Steel demand in automotive is expected to increase by 4.4% year-on-year to 66.7 million tons, and that of shipbuilding industry will rise by 6.7% to 17.6 million tons. Household appliances and motorbike/motorcycle companies are also expected to see demand grow, with expected increases of 3.8% and 5.2% respectively. These positive growth sectors are underpinned by policy interventions to upgrade consumption and advanced manufacturing technologies.
Traditional sectors meanwhile remain a drag on demand. Steel consumption in the construction industry, which is responsible for close to half of the total demand to date, is predicted to drop 4.1% to 384 million tons in 2026 from a 12.9% decline in the last year. The container industry is under additional strain, for which demand is expected to drop by 23.8% after a 35.5% decline. The energy and hardware products segments will also transition from growth to contraction, with demand declining 2.7% and 3.7% respectively. As it relates to supply, policy control will be rigid, focusing on “total volume control and structural optimization”. The Steel Industry Steady Growth Work Plan (2025-2026) explicitly prohibits additional capacity; differentiated regulatory policies are anticipated to facilitate the exit of suboptimal production capacity. Although steel mills have been relatively hesitant to cut the output they produce voluntarily due to stability in profit margins, crude steel output is expected to decline slightly in 2026, enabling a “weak balance” in supply and demand. This supply-demand relationship will establish a small upward tilt in the fundamentals for the steel price.
| Quarter | HRC (Hot Rolled Coil) Forecast | Rebar (Construction) | Driving Factors |
| 2026 Q1 | $580 – $610 / Ton | $550 – $570 / Ton | Post-CNY Restocking |
| 2026 Q2 | $620 – $650 / Ton | $590 – $620 / Ton | Peak Infrastructure Season |
Cost and Policy: Two External Drivers of Price Volatility More broadly speaking, prices of steel will be driven by raw material costs and industrial policies as 2026 dawns. The cost structure in raw material is being dramatically restructured. Iron ore supply will be more plentiful with plans for the Simandou project, and larger mining sites are expected to ramp up and increase capacity, leading to an expected 12% decline in annual average prices to about $90/ton. That will drive down steel production costs and will help mill profitability. By contrast, the demand for coking coal will continue to be stable by way of domestic safety constraints, as well as anti-involution policies, which restrict the downward flexibility of the overall rates. Coke prices, which track coking coal trends with weak independent drivers, are likely to fluctuate between 1,300 and 1,900 yuan per ton, keeping coking companies under profit strain, if only near the break-even line.