Steel Futures Edge Higher as Chinese Industrial Activity Stabilizes

Production Discipline

Major steel producers in China have maintained strict output controls in December to prevent inventory bloating. This supply discipline is successfully countering the seasonal slowdown in construction demand. Inventory data indicates that warehouse stocks are depleting slightly faster than historical averages for this time of year.

Market Sentiment

While the property sector remains a drag, sentiment is improving in the manufacturing and infrastructure sectors. The stabilization of prices above the 3,000 Yuan mark is viewed as a positive signal for 2026, suggesting that the worst of the bearish cycle may be behind the industry.