The Impact of Steel Futures on the Spot Market in 2025
release time：
2025-07-04 18:25
Ⅰ、 Short term impact: Supply and demand mismatch drives futures prices to rebound
1. Supply contraction alleviates inventory pressure
The reduction in spot production will directly lead to a decrease in market supply. For example, in 2024, steel mills passively reduced production under the pressure of losses, causing a temporary supply-demand mismatch and driving the price of rebar to rebound in April and October. If the production reduction continues in 2025, the low inventory state may further support the short-term upward trend of futures prices.
2. Market sentiment and expectation guidance
Reducing production often signals a tightening of supply, which may enhance market expectations for a price rebound. Data from January 2025 shows that despite sluggish demand, steel mills' production cuts and low inventory levels still cause rebar futures prices to fluctuate within the range of 3250-3300 yuan/ton, demonstrating the market's sensitivity to the supply side.
Ⅱ、 Long term impact: Supply elasticity and weak demand constrain the price center
1. Supply elasticity limits rebound height
Although steel mills may reduce production in the short term, long-term idle capacity (such as the thread production line after switching to coil production) may quickly resume production due to improved profits, creating new supply pressures. By 2025, the production capacity of rebar is expected to be balanced, but the absolute stock is still high, and the supply elasticity redundancy will suppress the continuous rise in prices.
2. The demand side drags down the price center
The demand for steel in real estate is expected to decrease by 6% year-on-year (a decrease of about 20.75 million tons), and the increase in infrastructure can only partially offset it, resulting in an overall demand decline of 5.5%. Even if production is reduced, weak demand will still suppress the price center. It is expected that the average spot price of rebar will be about 3300 yuan/ton in 2025, a decrease of 250 yuan/ton from 2024.
Ⅲ、 The bidirectional effect of policy and cost factors
1. Policy driven volatility
-Domestic policy: The pace of special bond issuance and the landing of infrastructure projects may trigger a short-term demand pulse rebound, for example, the accelerated issuance of special bonds in 2024 has driven price rebounds.
-International environment: Federal Reserve interest rate cuts, changes in trade policies, and other factors may exacerbate market volatility, indirectly affecting futures prices.
2. Weakening of cost support
By 2025, the prices of iron ore and coke are expected to drop to $90/ton and $1000/ton respectively, and the production cost of rebar will decrease to $2740/ton. The weakening of cost support may drag down the long-term center of futures prices.
summarize
The short-term impact of reduced production of threaded spot on futures prices is mainly positive, which may trigger a temporary rebound; However, due to weak demand, supply elasticity, and cost reduction in the long term, the price center will still be under pressure. In 2025, the rebar market is expected to exhibit the characteristics of "central downward shift and intensified volatility", with the core range of futures prices being 2800-3800 yuan/ton.
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