Seasonal factors drive Chinese HRC, rebar prices lower in Feb'26

• Seasonal demand slowdown during Lunar New Year weighs on steel consumption
  
  
• Construction activity pauses, pressuring rebar prices more sharply
  
  
• Winter environmental curbs and maintenance shutdowns temper steel production
  
  

Morning Brief: Chinese hot-rolled coil (HRC) and rebar prices both declined m-o-m in February 2026, reflecting seasonal demand weakness during the Lunar New Year holiday period. Tangshan's benchmark HRC prices fell by RMB 33/t ($5/t, 1.0%) m-o-m to a monthly average of RMB 3,299/t ($465/t) compared with RMB 3,332/t in January. Rebar prices declined more sharply by RMB 57/t ($8/t, 1.8%) to RMB 3,088/t ($435/t) from RMB 3,145/t in the previous month.

As seen in previous years, steel demand slowed markedly during the Lunar New Year period as construction sites and manufacturing facilities either paused or reduced activity. The slowdown was more pronounced for long steel products, as construction projects across northern China suspended work during the holiday period and amid winter weather conditions. Flat steel consumption from manufacturing sectors also weakened, though some mills continued operating to maintain supply commitments.

At the same time, several mills scheduled maintenance shutdowns or reduced operating rates during the holiday period. Northern China-based producers also continued to operate under winter environmental restrictions aimed at curbing air pollution during the heating season. In addition, Beijing has maintained policies aimed at preventing growth in crude steel output, encouraging supply discipline among mills. However, these supply-side adjustments were not sufficient to offset the sharp fall in demand at the start of the month, resulting in downward pressure on prices across both flat and long steel segments.

Meanwhile, raw material costs remained broadly stable m-o-m, providing some cost support to finished steel prices. Iron ore prices moved within a relatively narrow range during the month, while coking coal and coke markets also showed limited fluctuations. This helped cushion a deeper correction in finished steel prices despite weak seasonal demand.

Snapshots of HRC, rebar price movements in Feb'26

HRC prices decline m-o-m amid seasonal manufacturing slowdown: HRC prices moved lower during February as trading activity weakened significantly during the Lunar New Year holidays. At the start of the month, many downstream manufacturers slowed or temporarily halted production, leading to reduced procurement of flat steel products. Market participants reported that purchases were largely limited to immediate requirements, with buyers delaying restocking until after the holiday period.

Although some mills reduced production or carried out maintenance during this period, the scale of supply adjustments remained limited relative to the drop in demand. As a result, HRC prices softened through much of the month. Toward the latter half of February, trading activity gradually resumed as downstream sectors began returning to normal operations and some buyers re-entered the market to replenish inventories. However, the recovery remained gradual and insufficient to offset earlier losses, resulting in a lower monthly average price compared with January.

Rebar prices fall more sharply as construction demand stalls: Chinese rebar prices recorded a steeper decline in February, reflecting the deeper seasonal slowdown in construction activity. Construction sites across northern China largely halted operations during the Lunar New Year holidays, significantly reducing demand for long steel products. Cold weather conditions in several northern regions further limited outdoor construction activity during the period.

At the same time, production adjustments among mills were partly driven by weak profitability in the construction steel segment, particularly among electric arc furnace producers. Some mills reduced output during the holiday period or scheduled maintenance shutdowns, while winter environmental curbs in northern regions also limited operating rates at certain facilities.

As a result, spot market transactions remained subdued for much of the month. In the latter part of February, demand began to recover slowly as construction projects gradually resumed operations. However, buyers remained cautious and purchases were largely need-based, preventing any meaningful rebound in prices before the end of the month.

Outlook

Both HRC and rebar prices have shown signs of stabilizing in early March as market activity gradually improves following the Lunar New Year holiday period. Demand from manufacturing sectors such as automotive and appliances is expected to recover gradually as factories resume full production schedules, which could lend some support to HRC prices. However, the pace of recovery may remain moderate as buyers continue to adopt cautious procurement strategies.

Meanwhile, the outlook for rebar will depend largely on the pace at which construction activity rebounds with improving weather conditions. As infrastructure and property projects gradually resume work, demand for construction steel could strengthen in the coming weeks. At the same time, relatively firm raw material costs and continued supply discipline among mills may provide some support to finished steel prices, potentially limiting further downside despite still-fragile demand conditions.