Double Steel Weekly Report | 2026 Week 29 (July 7-July 13)

Steel Mills’ Supply Cuts Defend Prices Against Off-Season Slump; Continuous Influx of Low-Priced Asian Cargoes Keeps Steel Market Stagnant

Double Steel Weekly Report | 2026 Week 29 (July 13)

Release Date: July 13, 2026

Exchange Rate Base: USD/TWD 32.19 (Esun Bank Spot Selling Rate)

Market Overview: Diverging Trends in Upstream Raw Materials; Baowu’s Supply Cuts Defend Prices Against Off-Season Stagnation

Diverging signals emerged across raw material costs this week: iron ore recovered slightly, whereas coking coal and scrap steel weakened in tandem, indicating limited cost-side support. Chinese steel mills focused primarily on curtailing supply to defend prices (exemplified by Baowu Steel bucking the trend with upward revisions for its August list prices), a strategic move driven by margin defense rather than demand recovery.

The domestic Taiwanese market faced continuous pressure from the penetration of low-priced hot-rolled coil (HRC) from South Korea and Vietnam, leaving China Steel Corporation's (CSC) August price announcements under considerable downward revision pressure; however, localized supply shortages in the southern rebar sector paired with mill listing movements introduced short-term volatility. In the special steel sector, the Mysteel Special Steel Index maintained its premium structure over commercial carbon grades, and 45# round bar prices remained stable. Nevertheless, overall downstream demand stayed conservative, weighed down by a sluggish European automotive sector and structural slowing in global consumption, leaving the market lacking short-term upward momentum. Procurement Advice: Wait-and-See.

1. Bulk Raw Materials & Leading Macro Indicators

Raw material costs diverged, leaving overall short-term support thin:

Iron Ore: 98.72 USD/T, weekly up 0.43% (2026-07-13)
Hot Rolled Coil (HRC): 1,174.00 USD/T, weekly up 0.42% (2026-07-13)
Rebar / Commercial Steel: 3,069.00 CNY/T, weekly up 0.49% (2026-07-13)
Coking Coal: 237.00 USD/T, weekly down 1.66% (2026-07-13)
Scrap Steel (International): 376.00 USD/T, weekly down 1.83% (2026-07-13)
Tangshan Billet Q235: 2,970 CNY/T (2.97 CNY/KG) (2026-07-13)
45# Quality Special Steel Round Bar: 3,580 CNY/T, daily flat (2026-07-13)

In the index and freight sectors, the Mysteel Special Steel Index closed at 3,943.64 points, the Commercial Steel Index registered at 3,273.74 points, and the Baltic Dry Index (BDI) reported at 2,944 points. A critical macro variable to monitor is the rebar-to-billet spread, which squeezed down to 39.6 CNY/T, hitting recent lows and severely crushing re-rolling margins at mills. Tangshan billet averages hovered at a relatively elevated level of 2,970 CNY/T, reflecting cost rigidity that downstream demand cannot adequately absorb.

Simultaneously, the Taiwan Dollar weakened further, with the USD/TWD spot selling rate climbing to 32.19 (spot buying rate at 32.09), passively raising actual import costs for domestic buyers. The Renminbi also maintained a soft posture, with USD/CNY rising 0.3% weekly to 6.7862, which further enhances the export price competitiveness of Chinese steel. As global steel prices face accelerating downward pressure, August shipping allocations for Vietnam's Hoa Phat and Formosa Ha Tinh were fully booked, highlighting saturated supply across Southeast Asia. Meanwhile, Indian HRC slid to 606 USD/T, and South Korea's POSCO targeted Taiwan with HRC offers at CFR 580 USD/T—a sacrificial pricing stance. Consequently, CSC's mid-August price announcements face the largest correction pressure of the year, likely forcing import offers down by an additional 10 to 30 USD/T.

2. Deep-Dive Commodity Analysis

Steel Billet & Square Billet

Tangshan billet prices locked into a standoff around 2,970 CNY/T this week, showing no clear signs of a breakout. While dual declines in raw materials—iron ore registering eight weeks of consecutive losses and coking coal reversing downward—should theoretically pressure spot quotes lower, billet offers remained completely stationary. This indicates that Chinese steel mills are utilizing firm pricing to curb financial losses rather than offering price concessions to chase volume. Baosteel’s minor upward revision of its list prices stems directly from this logic: with profitability halved and most mills operating in the red, producers prefer cutting output to defend price baselines over slashing quotes to clear stock. International billet markets faced corresponding weight, with Chinese 3SP 150mm billet export offers sliding to FOB 462–465 USD/T, underscoring weak demand across Asia.

On the demand front, crude steel supply cuts lagged behind the drop in consumption, driving continuous inventory accumulation. The off-season drag, exacerbated by summer heat and extensive rainfall, muted downstream buying interest, pointing to a slow destocking process and leaving billet prices lacking genuine demand-driven support. For Taiwanese buyers, the market presents a contradictory window where raw material costs fall but mills artificially prop up quotes. Operational focus should center on small-batch, on-demand purchasing while avoiding large forward bookings. Buyers aiming for mid-to-long-term restocking will secure better leverage by waiting for Chinese mills' firm pricing stance to soften.

Special Steel & Round Bars

The raw material side for special steel displayed conflicting signals. A monthly drop of over 5% in scrap steel suggests sustained downward cost pressure, which theoretically lowers special steel manufacturing expenses. However, LME nickel futures staged a bottom-up reversal this week, snapping a five-week consecutive losing streak. This recovery has established a structural floor under the cost baseline for nickel-bearing round bars (such as the SUS304 series and alloy steel grades), making suppliers highly reluctant to offer deep discounts.

Across major origins, Chinese stainless steel spot and futures markets remained depressed under the joint weight of Tsingshan Group's price cuts and stagnant off-season trading. Conversely, Japanese and South Korean mills maintained tight price adjustments due to stable exchange rates and freight, keeping specification availability normal. In the domestic Taiwanese sector, price concessions from POSCO paired with fully booked August lines at Hoa Phat and Formosa Ha Tinh indicate compressed space for low-priced import substitution, leaving specialty specifications reliant on Japanese and South Korean sourcing. Machinery processing and automotive components buyers maintained a highly cautious, watch-and-see stance, matching the sluggish sentiment in mainland China.

While Chien Shing's return to profitability provided a positive headline, it remains an isolated corporate recovery unable to stimulate the broader market. Procurement Strategy: The final results of the Indonesian nickel ore quota reviews remain the single largest variable before the end of July; if nickel continues to climb, it will drive alloy round bar offers higher. Importers should maintain rolling short-term orders for nickel-bearing items and avoid large forward exposure. Carbon steel round bars, however, can be aggressively negotiated amid the monthly scrap drop, allowing buyers to lock in 1 to 2 months of standard consumption while refraining from speculative over-ordering.

Carbon Structure Steel (45# Round Bar)

The spot price of 45# special steel round bar consolidated weakly this week, holding flat at 3,580 CNY/T, though regional price divergence widened. Major markets including Shenyang, Changsha, and Guangdong all registered downward pressure, with quotes in Shenyang sliding to 3,520–3,580 CNY/T and Guangdong falling to 3,680–3,690 CNY/T, while Fujian and Tianjin witnessed covert discounting. Lowered list prices from mainstream mills like Lingsteel and Benxi Steel further confirmed the soft tone of the broad market.

Given that China's quality special steel round bar market serves as a primary alternative and pricing benchmark for Taiwan, its downward consolidation directly impacts procurement costs and local pricing structures for Taiwanese importers. While the softer Chinese market provides local buyers with enhanced议价 room, it simultaneously signals broader structural weakness in global manufacturing.

In terms of supply and demand, manufacturing operations entered their peak summer off-season. Downstream machinery and automotive components enterprises faced thin order books, keeping operating rates low and procurement restricted to hand-to-mouth replenishment. On the cost side, weakening coking coal and billet prices reduced the momentum for mills to maintain high list prices. Faced with rising inventory weight, traders adopted price-cutting liquidations, while an influx of low-priced external cargo intensified local competition. Spot prices are projected to fluctuate within a narrow, weak band or edge slightly lower in the short term. Buyers are advised to utilize this pricing window for measured restocking while closely controlling inventory carrying costs.

Leading Indicators & Associated Steel Fast-Facts

Global economic growth slowed to 3% (IMF, 2026-07-13), which, paired with stagnation in the European automotive sector, placed clear weight on the demand side. On the supply front, contraction in China contrasted with expansion in India and Southeast Asia, with Baowu's counter-cyclical price hike reflecting an output-restriction strategy to defend price floors. Slow maritime shipping recoveries continued to delay supply chain normalization. Long term, the low-carbon transition and reshuffled free trade networks—such as the India-EU FTA scheduled for signing in December 2026—will structurally alter competitive lines. Continuous influxes of low-priced imported wire rods kept local wire rod and wire product prices depressed, while investments in high-strength steel plates began gaining traction. Taiwanese special steel firms should pivot toward premium high-value opportunities while closely monitoring the impact of low-priced imports on downstream steel structures and automotive supply chains.

3. Key Regional Market Intelligence

China Market: Baosteel List Prices Defy Downward Pressure; CSC’s August Outlook Takes Center Stage

Baosteel raised its August list prices across the board by a modest 50 CNY/T. This counter-cyclical upward move, despite dual drops in coking coal and iron ore alongside plunging domestic steel quotes, underscores a clear "supply cut to defend prices" strategy aimed at buying time. This strategic floor has alleviated immediate downward pressure on CSC's upcoming August price announcements, raising expectations that Taiwan's domestic mill will opt for a steady-to-lower opening. Consequently, import costs for special steel round bars secured short-term structural support, while Baosteel's supply cut signal provides importers with better bargaining leverage.
Asia Market: Hoa Phat and Formosa Ha Tinh Booked for August; POSCO Slashes HRC Offers to Taiwan

Vietnam's twin steel giants fully booked their August shipping allocations. Meanwhile, South Korea's POSCO adjusted its hot-rolled coil export offers to Taiwan down to CFR 580 USD/T, a monthly drop of 10 USD. As broader Asian import prices consolidate at lower bounds (CFR 525 USD/T), a continuous influx of cheap imported wire rods keeps local Taiwanese wire rod and wire product quotes under severe pressure. Buyers should closely monitor the procurement window opened by POSCO's price reductions.
International Market: Global Steel Supply Structures Reshuffled via Sino-Indian Transitions

Rising international trade protectionism has cemented regional market isolation as the new normal. Structural supply contractions in mainland China contrast sharply with aggressive capacity expansions across India and Southeast Asia, pushing global steel consumption into a structural downturn. Special steel and round bar importers should proactively diversify their supply chains to mitigate long-term reliance on single-country origins, especially as low-cost competition from Southeast Asia ensures sustained downward price pressure.
Taiwan Market: June Cold-Rolled Imports Hit Record High Amidst Thin Trade Barriers

Taiwan's cold-rolled steel imports surged to an all-time high of 101,600 tons in June. The average import price from mainland China landed at 571 USD/T, matching the price level of hot-rolled Leeway (LW) cargo. The absence of active anti-dumping protections has allowed low-priced imported cold-rolled sheets to act as a primary price disruptor in the local coil market, a competitive dynamic that risks gradually expanding into the round bar sector.
China Market: Mills Deepen Production Cuts to Stabilize Domestic Billet and Rebar Baselines

Severe financial losses have prompted Chinese steel mills to deepen production cuts starting in July to mitigate the widening supply-demand mismatch. Rebar inventories are projected to post a 29.1% year-on-year increase, noticeably higher than historical averages. However, because the pace of supply reduction remains slower than the contraction in actual consumption, the structural bottom for spot prices will require additional time to clear. Importer acquisition costs for round bar billets will secure short-term support from these cuts, but near-term downside remains restricted. Given that mills selling at a loss remains common, buyers should carefully track raw material cost baselines before scaling up long-term supply contracts.

4. Critical Watchlist for Next Week

CSC’s August Price Announcements: The anticipated steady-to-lower opening will dictate the actual downward adjustment room for Taiwanese import offers.
Feng Hsin Steel’s Upcoming List Prices: Serves as the primary directional index for the domestic scrap and rebar sectors.
Indonesian Nickel Ore Quota Review Results (Before End of July): The core cost variable governing nickel-bearing stainless steel and alloy structure round bars.
The Rebar-to-Billet Spread (Current: 39.6 CNY/T): A sustained drop below this threshold will force steel mills to escalate supply cuts.
Execution Integrity of Chinese Production Cuts: Will determine whether the artificial price floor under Tangshan billet at 2,970 CNY/T holds or fractures.

Published by the Market Research Department of Double Steel Co., Ltd. Data Sources: TradingEconomics, Mysteel, Esun Bank, SteelWorld, International Steel News. DFor reference only; does not constitute investment advice.