China Steel Futures Stabilize Amid Winter Output Cuts and Stimulus Hopes

Production Discipline vs Weak Demand

Chinese steel mills have been proactive in cutting output to prevent an inventory glut. By maintaining a lower utilization rate of blast furnaces, producers have successfully defended the 3,000 Yuan support level. However, iron ore stocks at ports remain elevated, indicating that a sustained rally requires a significant demand catalyst.

New Export Licensing Regime

The implementation of China's new steel export licensing system has added a layer of procedural caution. While intended to manage trade friction, the move is also regulating the flow of material, preventing localized gluts and helping stabilize domestic prices in early 2026.