Weekend Market Update: Post-Holiday Steel Prices Stay Firm, BDI Breaks 3,000, New Twists in Hormuz

This Week’s Core Themes: Three Forces at Play

During the first full trading week after the May Day holiday (May 4–9), global steel markets were pulled by three simultaneous forces:

China’s domestic steel prices continued to strengthen post-holiday, driven by restocking and cost-side support, with all five major product categories rising.
In global shipping, the Baltic Dry Index (BDI) reclaimed the 3,000-point threshold for the first time in two years, with Capesize daily charter rates breaking $46,000.
The Strait of Hormuz situation swung repeatedly between ceasefire and confrontation, keeping war risk premiums at elevated levels.

Together, these three forces make current procurement decisions and export pricing far more complex than they were before the holiday.

China Domestic Market: Post-Holiday Momentum Sustained, Solid Cost Floor

Returning from the May Day break, China’s domestic steel market continued its pre-holiday firmness. According to Huachuang Securities’ weekly report of May 9, as of May 8, prices of all five major products had risen compared with before the holiday:

Rebar: CNY 3,470/t, up 1.82% (+CNY 62)
Wire rod: CNY 3,771/t, up 1.70% (+CNY 63)
Hot-rolled coil: CNY 3,485/t, up 2.06% (+CNY 70)
Cold-rolled coil: CNY 3,865/t, up 1.59% (+CNY 60)
Medium plate: CNY 3,580/t, up 2.84% (+CNY 99)

According to SunSirs data, the five major products delivered an average weekly gain of 2.19% in Week 18 (May 4–8), with medium plate leading at 2.99%, rebar at 2.38%, and HRC at 2.16%.

Supply-side highlights: Total output of the five major products stood at 8.3983 million tonnes this week, down 150,000 tonnes from pre-holiday levels. Rebar production fell by 102,700 tonnes to 1.9665 million tonnes, while HRC output dropped 46,000 tonnes to 30,061 tonnes. This proactive production discipline was a key factor supporting post-holiday price strength.

Inventory dynamics: Total steel inventories reached 16.4658 million tonnes, down 13,300 tonnes week-on-week. Social inventories fell by 63,900 tonnes, while mill-side inventories rose slightly by 50,600 tonnes, keeping the overall destocking rhythm intact.

Demand side: Combined apparent consumption of the five major products was 8.4116 million tonnes, down 683,200 tonnes from pre-holiday levels due to fewer trading days. On the first trading day after the break, building materials traded volumes reached 158,700 tonnes — the highest single-day volume so far this year — validating the reality of post-holiday restocking demand.

Industry profitability: As of May 8, 247 blast-furnace steel mills reported a profit ratio of 60.17%, near the year’s high. Blast-furnace rebar delivered a gross profit of CNY 134/t, HRC CNY 133/t, while CRC remained in negative territory at -CNY 98/t. Overall profitability has improved markedly compared to pre-holiday levels.

Outlook: Huachuang Securities expects near-term steel prices to fluctuate within a stable range. The traditional rainy season is approaching; if construction activity is disrupted, building steel demand may ease. However, the strong cost floor provided by raw materials leaves limited room for a deep price decline.

Raw Materials: Iron Ore Holds at High Levels, Coke Market Stable

Raw materials provided an effective cost floor for finished steel prices this week.

Iron ore: As of May 8, the main iron ore futures contract settled at CNY 814.5/t, up CNY 18.5/t w/w. Qingdao Port 60.8% PB fines stood at CNY 843/dmt, up CNY 17/t w/w. On the supply side, global iron ore shipments reached 33.487 million tonnes, up 987,000 tonnes w/w, while arrivals at Chinese ports totaled 25.806 million tonnes, up 2.15 million tonnes w/w. On the demand side, daily hot metal output across 247 mills averaged 2.3891 million tonnes, with blast-furnace operating rates at 83.26%. Elevated hot metal output and declining mill-side ore inventories provided a strong support floor for ore prices.

Latest quotes on May 9: Qingdao PB fines CNY 793/wmt (up CNY 2 from the prior day), Super Special fines CNY 666/wmt.

Coke: The port coke market remained steady. Latest quotes on May 9: Grade 1 wet-quenched coke CNY 1,560/t, Grade 1 dry-quenched coke CNY 1,760/t, first-class wet-quenched coke CNY 1,660/t. Coking coal supply remains relatively ample, but destocking and high hot metal output offer support. Prices are expected to fluctuate at high levels.

Scrap: Shanghai scrap quotes stable: heavy plate scrap (≥8mm) CNY 2,250–2,310/t, heavy scrap CNY 2,070–2,130/t.

Comprehensive cost judgment: Both iron ore and coke remain in high price ranges, and daily hot metal output holds at roughly 2.39 million tonnes. The cost-side support for steel prices is unlikely to fade in the near term.

Global Shipping: BDI Returns to 3,000 After Two Years

The most closely watched international market development this week was the BDI’s climb back above the 3,000-point mark — a threshold last seen in December 2023. On May 7, the BDI closed at 3,034, up 1.4% on the day and +13% from a week earlier. From a starting point of 1,995 in early April, the index has surged 49% to its highest level since 2024 — a rally comparable in strength to the super-cycle of 2021.

A Changjiang Securities report published on May 11 attributes the surge to three drivers: seasonal restocking demand for iron ore and coal (Capesize iron ore cargo volumes +35.1% y/y, Panamax coal cargo volumes +182.1% y/y); explosive growth in bauxite exports from Guinea with very long haul distances; and a structurally tight Capesize fleet supply (expected fleet growth of only 2.3% for the full year).

By vessel type, Capesizes have been the core engine of this rally. On May 7, average time-charter equivalent (TCE) earnings jumped to $46, 017 / d a y, u p$ 46,017/day,up3,368 from the prior day. Panamax average earnings reached $19,800/day, with available tonnage tightening markedly in the Atlantic basin.

For steel trade, the SCFI composite index stood at 1,954.21. Rising freight rates have already begun pushing up CFR offer prices for steel exports while simultaneously eroding the price competitiveness of Chinese origin cargoes.

Geopolitics: Hormuz Swings Between Ceasefire and Clashes

The Strait of Hormuz situation underwent a rapid “escalate → ease → re-escalate” cycle over the past three days.

May 5: Iran’s Supreme Leader’s foreign affairs advisor, Velayati, stated that the Strait of Hormuz had been sealed and would not reopen unless the “national will of the Islamic Republic of Iran” so determined, adding that a state of war between Iran and the US still persisted.
May 7: A brief exchange of fire occurred in the Strait of Hormuz. The US stated it had intercepted an Iranian attack and conducted “self-defensive strikes”; Iran accused the US of violating the ceasefire. After the clash, the US stated the ceasefire remained “valid,” and Iranian media reported the Strait situation had “returned to normal.”
May 7–8: Pakistan and Switzerland offered to mediate between the US and Iran. President Trump simultaneously claimed negotiations were “progressing very well” and threatened to “bomb Iran even harder” if a deal could not be reached. US officials also sought to downplay the latest military action as a “light touch” to avoid a spiral of escalation.
Wall Street’s latest assessment: In a May 9 note, Citi strategists said their baseline scenario remains that the Strait of Hormuz disruption will significantly ease by late May, but warned that the difficulty of reaching a US-Iran agreement has increased. Near-term upside risks for oil prices are elevated, with a move toward $120/barrel not to be underestimated.

Practical impact on steel trade: War risk premiums for vessels transiting the Strait of Hormuz remain at 3%–7.5% of cargo value (versus the normal 0.25%), and container freight rates to Jebel Ali remain at elevated levels. Kallanish’s latest weekly report noted that Iran has even banned slab and flat steel exports following the strikes, further disrupting supply patterns in the Middle East and surrounding markets. Citi’s baseline implies late May is a crucial observation window, but uncertainty remains extremely high. All steel contracts touching the Persian Gulf must continue to factor high war risk premiums into pricing.

Key International Market Developments

Southeast Asia (Vietnam)

Per Mysteel’s weekly report, Chinese HRC export offers jumped noticeably after the holiday, with Bayuquan-origin cargoes quoted at $530 / t F O B a n d t r a d e a b l e l e v e l s a r o u n d$ 530/tFOBandtradeablelevelsaround520/t FOB. However, overseas buyers are pushing back against the rapid price increases. Pre-holiday export transactions helped relieve mills’ order pressure, but end-user demand improvement remains limited.

In Vietnam’s import market, offers for Indian-origin SS400 and SAE1006 HRC retreated to $600 – 610 / t C F R V i e t n a m, w i t h t r a n s a c t i o n s c e n t e r i n g a t$ 600–610/tCFRVietnam,withtransactionscenteringat590–600/t CFR. Local major mills raised their June/July shipment HRC quotes to $606–610/t CIF Haiphong, lending some support to import prices.

Fundamentally, Vietnam’s Q1 2026 steel exports reached 2.94 million tonnes, up nearly 7% y/y. Driven by infrastructure investment and a real estate recovery, Vietnam’s steel consumption is expected to grow 5–8% for the full year, with domestic demand as the main growth engine.

India

A Morgan Stanley research report highlights a structural price rebound in India’s steel market in 2026, with domestic consumption growing 8–9% against a global average of just 0.3%. That 7.4 percentage-point spread is a powerful demand story. However, raw material constraints are intensifying: iron ore imports have hit a seven-year high, and coking coal prices have risen 18%, squeezing mill margins.

On the short-end spot market, the picture is weaker. BigMint reported on May 8 that Indian induction furnace steel prices fell across the board, with the billet index down INR 350/t day-on-day to INR 40,850/t ex-works. Rebar (Fe 500) fell INR 200–500/t amid weak demand and cautious buyer sentiment.

Implication for Chinese exporters: India’s safeguard duties remain in effect until 2028 (stepped rates: 12% → 11.5% → 11%). For electrical steel, the BIS certification barrier remains tough to crack. Near-term weakness in India’s spot market diminishes the attractiveness of imports, but the long-term structural growth trend is unambiguous.

Turkey

Per Mysteel’s global steel weekly, Turkish rebar export prices dropped to $590 / t F O B, p r e s s u r e d b y q u o t a s a n d e x p o r t r e s t r i c t i o n s . D o m e s t i c p o r t r e b a r o f f e r s w e r e r a i s e d t o$ 590/tFOB,pressuredbyquotasandexportrestrictions.Domesticportrebarofferswereraisedto495–520/t, but actual deals were limited, with downstream buyers aggressively negotiating down.

Kallanish also noted that Turkish scrap prices retreated after peaking recently, primarily because finished steel sales remain persistently weak, mills’ margins are under pressure, and their tolerance for high-priced scrap is falling.

Saudi Arabia

Hadeed raised its May list prices for long products, though specific adjustment amounts were not publicly disclosed. Kallanish notes that after Hadeed’s aggressive price increases, Saudi long-product buyers are now actively scouting imported sources — a rare shift in a market that has long been dominated by local supply, reflecting how elevated price levels are reshaping procurement behavior.

Implication for Chinese exporters: Saudi buyers’ rising import appetite opens a wider-than-usual window for rebar and wire rod products. At the same time, the Saber-MIM mandate (effective May 1) must be carefully navigated: verify whether the relevant HS codes require MIM pre-approval before shipment.

Export Policy and Trade Barriers

Mysteel reports that China’s export tax rebate policy was further refined and differentiated in 2026, with rebate rates now more precisely calibrated by processing depth, alloy composition, and end-use application. The rebate rates applicable to ordinary hot-rolled coils can differ markedly from those for high-end galvanized sheet or electrical steel — a structure that guides resource flows toward higher technology content.

Internationally, the WTO Committee on Safeguards reviewed 38 safeguard measures at its April 27 meeting, of which 12 involved steel or metal products, including the EU’s investigation into grain-oriented electrical steel and the UK’s tariff-rate quota adjustments on certain steel products — drawing fresh attention to market access friction across multiple jurisdictions.

Key Cross-Cutting Trends

Three trends cutting across different markets deserve special attention this week:

Strengthened cost-price linkage: Firm domestic iron ore and coke prices, combined with rising ocean freight, are pushing up the CFR delivery cost of exported products, forming a transmission chain from “cost side → export side → international markets.”
Structurally elevated logistics costs: With the BDI above 3,000, Capesize TCE above $46,000/day, and the SCFI index climbing, logistics cost pressure on steel exports is steadily accumulating.
Geopolitics and demand divergence: Different international markets are charting their own paths — Southeast Asia showing strong demand growth, Turkey under downward pressure, India structurally bullish in the long term but weak in the short term, and Middle Eastern buyers beginning to pivot toward imports. This environment demands market-specific strategies, not a one-size-fits-all approach.

Directional judgment: We are currently in a window defined by three overlapping factors — strong cost support, seasonal demand, and high logistics costs. The downside for steel prices is limited in the near term, but a decisive upside break still requires tangible end-user demand to come through at volume.

Actionable Recommendations

🔴 For Procurement Managers

Long products (rebar/billet): Post-holiday restocking has largely been released, and near-term upside for prices is narrowing. With the rainy season approaching and potentially dampening construction demand, buy on a hand-to-mouth basis and avoid large speculative positions. Monitor the actual impact of environmental-related production curbs in northern China.
Flat products (HRC/CRC/HDG): Export offers continue to climb (HRC FOB at $520–530/t), while domestic flat product output is contracting proactively, tightening tradable spot availability at home. Maintain normal procurement rhythms and avoid locking in forward costs by chasing high FOB quotes.
Pipes: Carbon steel pipe prices at Tianjin and Shandong mills are steady; normal procurement is advised. If exporting to the Middle East, recalculate landed costs including the current Hormuz war risk surcharge (still 3%–7.5% of cargo value).
Specialty steel (electrical steel): Demand for CRGO and CRNGO remains solid, supported by high-end manufacturing. Continue normal procurement without rushing.
Coke: Port spot prices are stable for now, and high hot metal output supports demand. Prices are expected to fluctuate at high levels. Replenish moderately based on your own inventory situation.

🔵 For Export Sales Managers

Southeast Asia: Top near-term priority. Chinese HRC FOB has already reached $520 – 530 / t, a n d b u y e r a c c e p t a n c e i s l i m i t e d . H o w e v e r, r e a l d e m a n d i n V i e t n a m, I n d o n e s i a, a n d M a l a y s i a i s g r o w i n g . A m o d e s t c o n c e s s i o n o f$ 520–530/t,andbuyeracceptanceislimited.However,realdemandinVietnam,Indonesia,andMalaysiaisgrowing.Amodestconcessionof5–10/t is acceptable to secure volumes and lock in orders ahead of further cost-driven price increases.
Middle East: Saudi buyers are showing import appetite, opening a wider export window for long products. But two preconditions apply — verify Saber-MIM compliance for every shipment (mandatory since May 1), and explicitly clarify in contracts which party bears the Hormuz war risk surcharge (still 3%–7.5% of cargo value). Consider Sohar (Oman) or Jeddah (Saudi Arabia) as alternative entry points to reduce exposure to the eastern Gulf.
Turkey: Rebar FOB has dropped to $590/t; domestic demand is weak and quota pressure significant. Focus on higher-value differentiated products (high-grade electrical steel, alloy steel) and avoid head-to-head price competition with local mills in commodity grades.
India: Long-term monitor, near-term avoid. Electrical steel is blocked by the BIS hard barrier; long-product spot demand is sluggish; safeguard duties remain in place until 2028. Treat India as a strategic long-term opportunity, paying close attention to any BIS policy shifts, and accumulate certification resources in the meantime.
South America and Africa: Supplemental markets to watch. Brazil presents high anti-dumping barriers. African markets (Egypt, South Africa, Kenya) offer potential electrical steel demand driven by power infrastructure build-outs with generally lower trade barriers, but currency risks — particularly Nigerian naira and Egyptian pound — require dynamic management.

⚡ Urgent Note for All Managers

Given that the BDI has broken above 3,000 and ocean freight rates are still climbing, all CFR-based export offers should be re-costed for freight this week. Procurement managers should likewise anticipate that rising freight costs will push up subsequent landed costs for imported iron ore and coking coal, and reflect this trend in budgets now.

Disclaimer: This report is based on publicly available market information and professional analysis. It does not constitute specific investment or trading advice. All data and judgments are based on market conditions as of May 11, 2026, and may change thereafter.

📧 Contact Email: amy@amyinsights.com
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