Chinese HRC, rebar prices rise in Mar'26 despite subdued demand

• Post-Lunar New Year demand recovery remains insufficient
  
  
• Cautious procurement caps rebar gains despite seasonal improvement in construction
  
  
• Stable raw material costs, measured supply response limit downside
  
  

Morning Brief: Chinese hot-rolled coil (HRC) and rebar prices both edged higher m-o-m in March 2026 as demand recovered from Lunar New Year lows, but the improvement remained insufficient to drive meaningful price strength. Tangshans benchmark HRC prices increased by RMB 48/t (1.5%) m-o-m to a monthly average of RMB 3,347/t, compared with RMB 3,299/t in February, while rebar prices rose by RMB 36/t (1.2%) to RMB 3,124/t from RMB 3,088/t in the previous month.

Demand improved as manufacturing units resumed operations and construction sites gradually restarted work, but consumption remained below pre-holiday levels. Buyers continued to procure largely on a need basis, with limited restocking activity, preventing a stronger pickup in spot transactions and capping the extent of price gains.

At the same time, mills increased operating rates as maintenance shutdowns concluded, leading to a gradual rise in supply availability. However, production discipline remained measured amid weak profitability and policy guidance on output control. The recovery in supply outpaced the improvement in demand, keeping the market imbalanced and limiting upward momentum across both flat and long steel segments.

Meanwhile, raw material costs remained broadly stable m-o-m, with limited movement in iron ore, coking coal and coke prices. Stable input costs provided a floor to finished steel prices, but did not contribute to upward momentum, leaving price direction dependent on demand recovery.

Snapshots of HRC, rebar price movements in Mar'26

HRC prices edge higher m-o-m on moderate demand recovery

HRC prices recorded a modest increase in March as manufacturing demand improved following the holiday period, but the recovery remained uneven and insufficient to absorb rising supply. Downstream sectors such as automotive and appliances resumed production, but procurement activity remained cautious, with buyers limiting purchases to immediate requirements rather than rebuilding inventories.

At the same time, supply increased as mills resumed production, with operating rates rising more quickly than demand. This mismatch between supply availability and consumption kept transaction volumes moderate and limited the extent of price gains through the month.

Subdued domestic manufacturing sentiment and limited export support further constrained price upside, reinforcing the demand-led nature of the market. As a result, HRC prices edged higher on a monthly average basis, but failed to show sustained upward momentum.

Rebar prices rise m-o-m on seasonal recovery, but gains remain capped

Chinese rebar prices also increased in March, supported by the gradual resumption of construction activity following the Lunar New Year period. Infrastructure and property projects restarted across several regions, improving spot demand compared with February.

However, procurement remained cautious, with contractors continuing to adopt need-based buying strategies amid uncertain project pipelines and tight funding conditions. This limited the extent of price recovery despite improved activity levels.

On the supply side, production increased as mills restarted operations, though output remained influenced by weak margins and policy-driven discipline. Inventory drawdowns remained gradual, indicating that supply-demand balance had not tightened materially.

As a result, the increase in rebar prices reflected a seasonal rebound from February lows rather than a sustained improvement in underlying demand conditions.

Outlook

Both HRC and rebar prices have shown limited movement in early April, indicating that the post-holiday demand recovery has not translated into sustained price strength. HRC prices averaged RMB 3,358/t, while rebar stood at RMB 3,143/t in April (month-to-date), showing only marginal increases from March levels.

Demand from manufacturing sectors is expected to improve as production normalises, but continued cautious procurement behaviour and weak external demand may limit any sharp increase in HRC prices. The absence of sustained restocking demand remains a key constraint on further upside.

For rebar, the pace of construction activity recovery will remain critical. While seasonal factors support higher activity levels, persistent weakness in the property sector and cautious project execution are likely to cap demand growth.

At the same time, stable raw material costs and continued supply discipline among mills are expected to provide downside support. However, with supply remaining elevated relative to demand, these factors are insufficient to drive a sustained upward trend, leaving prices anchored near recent levels despite seasonal improvement in activity.