The steel industry in China remains in a critical state, according to January’s PMI data, showing structural divergence in demand and production. While industrial steel indicators reveal resilience in both production and demand, the Spring Festival has caused a short-term mismatch in supply and demand. As a result, the market is expected to experience mild upward movement with some fluctuations in February.

In January 2026, the steel PMI rose to 49.90%, signaling a slowing decline in industry activity. Despite reduced production, inventory pressures are mounting, and demand recovery remains uneven. Meanwhile, export orders continue to struggle, limiting external support for steel demand.

Looking ahead, the industrial steel market should remain relatively stable, bolstered by consistent demand, while the construction steel sector faces lower activity due to seasonal slowdowns. The February market will likely see minor fluctuations and slight price increases, with expectations shifting positively toward March and April.