Since early July, China’s ferrous metals sector has experienced a strong yet volatile upward trend, driven by supportive policies targeting price competition, phasing out outdated capacity, and emission reduction efforts in cities like Tangshan. Market sentiment has improved, lifting prices.

On the supply side, Tangshan implemented emission and production restrictions from July 4 to 15. By July 7, 16 blast furnaces were under maintenance, reducing daily molten iron output by approximately 39,500 tons. Capacity utilization dropped to 91.36%. Though billet supply has contracted slightly, positive billet margins and inflows from other regions have sustained high availability.

Demand remains weak. Downstream billet processors continue to face low margins and slow sales. Rolling mill maintenance persists, keeping billet demand suppressed. Despite slightly improved sentiment, procurement remains cautious.

As of July 8, billet inventories in Tangshan rose for 19 straight days to about 734,000 tons. Though inventories remain below last year’s level, the continued buildup signals weak demand. In the near term, raw material prices are expected to stay firm, but long-term supply pressures could lead to price corrections.