Raw material prices fell sharply, and finished steel prices also showed weakness. The new main rebar contract (2605) closed slightly lower, while the hot-rolled coil contract (2605) rose to a high of 3340 overnight before falling back to close at 3320.

The steel PMI for November 2025 was 48%, a decrease of 1.2 percentage points month-on-month, indicating a slowdown in the industry. Downstream fixed asset investment and real estate investment data continued to weaken, leading to a pessimistic demand outlook. However, short-term construction site funding continued to improve, with the funding rate for construction sites falling 0.07 percentage points this week to 59.49%, a decrease of 5.77% compared to the same period last year. Among them, infrastructure and municipal projects showed no improvement. The funding availability rate for non-building construction projects decreased by 0.09% to 60.59%, a three-month low; the funding availability rate for building construction projects continued to increase by 0.03% to 54.02%, a new high in recent years, and an increase of 5.67% compared to the same period last year. Looking at this week's small sample inventory data, the destocking of building materials increased significantly, but hot-rolled coil inventory increased slightly. However, afternoon data from SteelHome showed that the inventory of the five major steel products decreased by 352,200 tons to 13,655,900 tons. Specifically, rebar production decreased by 8.14%, inventory decreased by 5.21%, apparent demand continued to decline by 4.81%, apparent demand for wire rod decreased by more than 8%, and total hot-rolled coil inventory decreased slightly by 0.14%, with apparent demand decreasing by 1.67% month-on-month; only cold-rolled coil apparent demand increased by 1.6%.

On the supply side, apparent demand for steel improved. This week, the profit margin of 247 steel mills rebounded by 1.3% to 36.36%. Blast furnace operating rates still decreased by 0.93% week-on-week to 80.16%, and blast furnace ironmaking capacity utilization decreased by 0.9% to 87.08%. Average daily pig iron production continued to decline by 23,800 tons to 2.323 million tons, a new low in over eight months, and a decrease of 3,100 tons year-on-year. More steel mills are expected to undergo maintenance in the later period, and some blast furnace production cuts are anticipated to materialize in December. Regarding short-process steelmaking, the profit margin of electric arc furnace steel mills continued to expand this week. Some mills that had reduced production due to previous losses have seen their profits recover, potentially leading to extended production hours and increased production saturation. The average capacity utilization rate of 90 independent electric arc furnace steel mills nationwide increased by 1.1% week-on-week to 53.82%, a high in over two months, and up 0.43 percentage points year-on-year. However, the average operating rate was 67.72%, a decrease of 1.41 percentage points week-on-week.

In summary, the current steel supply and demand situation remains weak, with limited supply and demand drivers. As the off-season deepens, the matching of production cuts with declining demand remains a key focus. Rebar and hot-rolled coil prices may still have room for correction. Everbright Futures comments that demand will face a decline cycle of about two months in the later period, and demand's upward driving force on prices remains insufficient. It is expected that rebar futures will mainly trade within a narrow range in the short term.

(Compiled by Wenhua; Edited by Zhao Qingwei)

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