China’s domestic steel prices are expected to fluctuate within a range in the second half of 2025. The strong policy expectations may lead to a short-term rebound, but medium- to long-term movements will hinge on supply-demand dynamics. The market could be challenging than in the first half and may face downward pressure if supply control is lax and demand growth remains modest.

The fiscal stimulus, ultra-long-term special government bonds, and coordinated monetary policy will sustain infrastructure-driven demand. Manufacturing demand for high-grade plates and specialty steels is also likely to remain resilient. However, continued declines in new housing starts will significantly limit construction steel demand.

On supply, rising profits may encourage higher output, potentially outpacing demand recovery and squeezing margins. The second half may see pressure from a weak real estate sector and flexible supply increases, likely causing steel prices to fluctuate within a range.