Market Snapshot (April 24–26, 2026)
The final trading days before China’s May Day holiday reinforce the narrative of a market caught between two forces: a pre-holiday demand pulse and cost-driven support on one side, and a rapidly escalating geopolitical premium on the other. Domestically, steel prices remain on a stable-to-firmer footing, with destocking accelerating across key product categories. Internationally, the situation in the Strait of Hormuz has deteriorated sharply over the weekend, injecting fresh urgency into logistics and procurement planning for any stakeholder with exposure to the Middle East, South Asia, or European supply chains.
China’s Domestic Market: The Pre-Holiday Pulse Holds Firm
The domestic steel market sustained its upward momentum through the final full trading week of April. Multiple B-level sources confirm a broad-based price advance. According to Mysteel’s weekend commentary, the five major steel product categories are still destocking with no fundamental contradictions in the supply-demand balance sheet, supporting a stable-to-firmer outlook. At the same time, a weekly report from Guojin Securities confirms that hot-rolled coil in the Beijing-Tianjin-Hebei region rose by RMB 40–60/t, with the national HRC average reaching RMB 3,387/t — up RMB 47/t week-on-week. Medium plate also firmed, with the average price across 25 major cities climbing to RMB 3,470/t, an increase of RMB 44/t w/w.
On the long products front, construction steel markets in northern and northwestern China recorded gains of RMB 10–20/t, while eastern and southern China saw steady moves with a mild upward bias. Tangshan billet gained RMB 40/t for the week, closing at RMB 2,970/t ex-works.
The rationale behind this price resilience is threefold. First, destocking accelerated: total inventories of the five major products continued their decline, supported by a seasonal pick-up in apparent consumption. Rebar stock draw was particularly pronounced, with mill inventory falling to 187,350 tonnes and social inventory to 579,100 tonnes. Rebar apparent demand reached 2.50 million tonnes, reinforcing the notion of a genuine pre-holiday demand pulse. Second, still-high inventories in key flat product categories like HRC (up approximately 12% year-on-year) and medium plate (up approximately 10% year-on-year) mean that destocking pressure will persist after the holiday, capping the scale of near-term price gains. Third, the “low-price cargo moving smoothly, high-price offers encountering resistance” pattern continues to define market dynamics, indicating that while buyers are engaging, they remain price-sensitive and unwilling to chase rallies.
Futures markets added confirmation of the upward tilt. The rebar 2610 contract closed at RMB 3,191/t on Friday, while the HRC 2610 contract settled at RMB 3,413/t, with Friday night trading extending to RMB 3,397/t. The carry from futures to physical markets remains constructive, though not explosive, providing a moderate tailwind into the holiday-shortened week ahead.
Supply-Side Context: Production Discipline Already Visible
Iron and steel output is already responding to policy signals and economic incentives. According to multiple research notes, daily hot metal output edged down to 2.3932 million tonnes, a marginal decline of 0.08% week-on-week — small in absolute terms, but directionally significant given the pre-holiday period when output typically rises.
Coinciding with this, the National Development and Reform Commission (NDRC) has formally set the tone for 2026 as a year of “orderly reduction of steel capacity”. The Steel Industry Stable Growth Work Plan (2025–2026) explicitly mandates continued cuts in crude steel output, with industry forecasts projecting production down to 930 million tonnes in 2026. More tangibly, 2026 also marks the first compliance year for the steel sector under China’s national carbon market, adding a new cost layer that will further incentivize production discipline at the mill level.
The net effect is a supply side that is gradually tightening — not enough to cause supply shortages, but sufficient to provide a moderate floor of approximately RMB 10–30/t under steel prices heading into May. The magnitude of this floor will depend on the actual pace of capacity utilization in the weeks following the holiday.
Raw Materials: Iron Ore Holds, Coke Attempts Third Hike
Raw material price dynamics remain the central driver of the domestic cost floor.
Iron Ore: The Mysteel 62% Australian fines forward index closed the week at USD 109.05/dmt, up USD 0.95/dmt w/w (+0.88%). The DCE iron ore futures main contract settled at RMB 786.50/t, rising RMB 8.00/t w/w (+1.01%). Port stocks at Qingdao showed PB fines at RMB 777.00/t. The supply-demand balance remains tight. Mysteel data show that global iron ore shipments in the April 13–19 period fell to 30.739 million tonnes, down 1.123 million tonnes w/w, while Australia-Brazil shipments specifically declined by 1.454 million tonnes to 25.36 million tonnes. In the background, the conclusion of annual benchmark iron ore negotiations between Chinese mills and major Australian suppliers has removed a degree of policy uncertainty, though supply disruptions from cyclone activity continue to pose sporadic risks.
Coke: The most significant cost-side development this weekend is the formal launch of the third round of coke price hikes. The second round (RMB 50–55/t) was fully implemented on April 20. On April 24, coking plants in Shanxi and Hebei formally proposed a third increase of an equivalent amount, targeting April 27 for implementation. Major steel mills have not yet responded. Current pricing reflects the already-tight supply: Shanxi first-grade dry-quenched coke is at RMB 1,640/t (+0.61%), first-grade wet-quenched coke at RMB 1,430/t (+0.70%), and port first-grade wet-quenched coke at RMB 1,530/t (+0.66%). Coking plant inventories are described by one market source as “nearly bottomed out” at 620,000 tonnes, while daily hot metal output of 2.393 million tonnes continues to pull on coke demand. The supply-demand scissors gap is widening, and a successful third-round implementation appears increasingly probable.
Scrap: Scrap prices are holding firm in the pre-holiday period as mills with low inventory positions engage in last-minute replenishment. In the Jiangsu region, hot metal remains approximately RMB 81/t cheaper than scrap, maintaining the cost advantage of blast furnace over electric arc furnace routes, but this is already well-understood by the market.
The combined impact of these raw material moves is a cost floor that continues to shift upward, providing price support for finished steel products even as end-user demand shows seasonal fluctuations.
Global Shipping Costs & Geopolitics: The Strait of Hormuz Situation Deteriorates Sharply
This weekend has brought a significant escalation in the Middle East maritime security situation — an escalation that directly impacts steel and raw material logistics.
On April 25, Iran’s Ministry of Defense issued a statement asserting that the Strait of Hormuz remains under Iranian control. This was rapidly followed by a report on April 26 indicating that Iran’s Supreme Leader had issued a direct instruction that the Strait of Hormuz must not return to pre-conflict status. This language signals a hardening of the Iranian position and sharply reduces near-term prospects for a negotiated normalization of Strait access.
The impact on shipping costs is already severe:
- Container freight: 40-foot container rates from Chinese ports to Persian Gulf destinations have broken through the USD 8,000 mark, with some carriers quoting all-in rates as high as USD 8,502 from Shanghai to Jebel Ali. This represents a roughly fourfold increase compared to pre-conflict levels from late February 2026.
- War risk premiums: The war risk insurance premium for vessels transiting the Strait of Hormuz has risen to 3% to 7.5% of hull value, compared to the standard 0.2%–0.3% pre-conflict. For a large vessel valued at USD 200–300 million, this translates into an additional insurance cost of USD 6–22.5 million per voyage.
- Alternative route costs: The China → Sohar (Oman) → Jebel Ali land bridge alternative now adds approximately USD 55–105/t plus applicable war risk premiums, while the China → Jeddah → Dammam land route adds approximately USD 65–125/t plus war risk premiums. These routes also introduce additional transit time of 3–10 days for the land leg.
- Shipping service disruptions: Major carriers including MSC, Maersk, and CMA CGM have suspended or significantly restructured their Middle East services. Vessel turnaround times have lengthened substantially, with some Shanghai-to-Jebel Ali routes now requiring 32 days and 10 hours of transit time.
Separately, on April 25, Germany announced plans to deploy a minesweeper and a command supply vessel to the Mediterranean in preparation for potential operations related to the Hormuz mission — a further signal that the crisis is deepening rather than abating.
For steel and raw material supply chains, the practical consequence is clear: any purchase or sales contract involving Persian Gulf ports — including Saudi Arabia’s Dammam, Jubail, and the entire UAE coastline — must now factor in a structural logistics cost premium that shows no sign of dissipating. This is not a short-term transitory spike; it reflects an ongoing military and political standoff.
International Steel Markets & Trade Policy
EU Market & CBAM
The EU’s carbon border adjustment mechanism (CBAM) entered full substantive implementation on January 1, 2026. On April 7, the European Commission published its first CBAM certificate price at EUR 75.36/t, based on the average EU ETS auction price for Q1 2026. By 2034, when CBAM free allowances are fully eliminated, the additional cost per tonne of steel exported from China to the EU is projected to reach EUR 140–160/t.
The trade defense dimension is tightening in parallel. The EU has reached a provisional agreement to reduce its steel tariff-free import quota to approximately 18.3 million tonnes and to increase out-of-quota tariffs to 50%, effective from mid-2026. For Indian HRC producers exporting to the EU, the cost of default CBAM obligations reaches up to EUR 293/t (approx. USD 343/t), indicating just how steep the green premium can become for suppliers without verified EPD documentation.
Notably, CBAM has also been a primary driver of the bullish trend in European domestic steel prices since the start of 2026. Market sources cited by McCloskey indicate that carbon cost risks are increasingly being accepted as a structural feature of the market.
North America: US-Mexico Tariff Regime Harden
On April 21, Reuters and multiple other A-level sources reported that US Trade Representative Greer has informed Mexican automotive and steel industry representatives that tariffs imposed under the Trump administration will not return to zero, even under a renegotiated USMCA framework. Current US tariffs on Mexican ordinary steel and aluminum products stand at 50%, with a 25% tariff applied to derivative products containing at least 15% steel or aluminum by weight.
Complementing this, on April 16, the White House announced tightened rules of origin for steel and aluminum imports transiting through Mexico. Only steel that has been melted and poured in Mexico, the United States, or Canada qualifies for duty-free treatment under USMCA; steel processed in Mexico from third-country (notably Chinese) feedstock will be subject to full tariffs.
The clear implication for exporters: Mexico is not currently a viable transshipment route for Chinese steel into the US market.
Other Regional Markets
Turkish rebar export prices remain in a tight range, with offers at USD 600–620/t FOB and tradeable levels around USD 590–600/t FOB. Export demand is described as limited, with local demand also beginning to slow, suggesting a market that has reached a near-term equilibrium. India, Southeast Asia, and other major producing regions continue to operate largely on their own supply-demand fundamentals, with no strong synchronization across geographies — each market trades its own balance sheet.
Export Policy: Strip Steel Rebate Remains Intact
Multiple confirmations this weekend reinforce our earlier analysis regarding export tax rebates. The most recent customs and tax policy guidance confirms that most ordinary-grade strip steel products continue to enjoy a 13% export tax rebate . The April 2026 round of export tax rebate cancellations targeted photovoltaic products, batteries, ceramics, and glass — not steel strip products. However, the 186 HS codes whose rebates were previously canceled (including low-value-added hot-rolled products) remain at zero. For exporters, precise HS code verification remains the key to protecting rebate eligibility, particularly at the boundary between alloy and non-alloy, and between different width categories.
Key Cross-Cutting Trends to Watch
Trend 1: The China domestic cost floor is solidifying.
Iron ore at USD 109/dmt, coke on a third attempted hike, and scrap holding firm — this cost stack is providing a reliable price floor for finished products. Even if demand softens seasonally after the holiday, this floor limits downside.
Trend 2: The Hormuz logistics premium is now a structural feature, not a transitory cost.
The hardening of the Iranian position over the weekend removes near-term prospects for Strait normalization. All supply chains transiting to or through the Persian Gulf must now budget for war risk premiums of 3%–7.5%, plus alternative routing costs.
Trend 3: Trade policy fragmentation is accelerating.
The EU, United States, and even Mexico are simultaneously tightening import controls and adding new layers of tariffs (traditional, anti-dumping, and carbon-based). Exporters cannot operate on a “one-size-fits-all” strategy — country-specific market access analysis is now essential.
Trend 4: The policy-driven supply contraction in China is proceeding, but gradually.
NDRC targets, environmental enforcement in Tangshan, and the first compliance year under the national carbon market all point in one direction — lower production. But mills still have some profit margin (blast furnace profitability ratio ~48%), and aggressive cuts will only come when margins compress further. For now, supply is gently declining rather than collapsing.
Actionable Recommendations
🔴 For Procurement Managers
| Product | Recommendation | Key Driver |
|---|---|---|
| Rebar / Billet | Lock in pre-holiday volumes by April 30 | Post-holiday cost pass-through from higher coke and iron ore is likely. Do not over-commit to large positions; billet stocks remain elevated. |
| Hot-Rolled Coil | Buy on the April 28–30 dip window | Resistance to high prices is growing; HRC inventory overhang persists. Use the final pre-holiday days to negotiate. |
| Cold-Rolled / Galvanized | Maintain normal procurement rhythm | Manufacturing (appliances, auto) support is steady; no shortage risk. |
| Welded Pipes | Prioritize pre-holiday order lock-in | Tangshan and northern China environmental curbs are tightening; May supply disruptions are increasingly likely. |
| Coke | Increase procurement allocation moderately | Third-round price hike (RMB 50–55/t) targeting April 27 implementation; coking plant inventories near bottom. Early action captures pre-hike pricing. |
| Iron Ore | Maintain steady intake; monitor post-negotiation supply normalization | Supply disruptions from Australian cyclone season remain a risk. Port stocks are declining, supporting near-term prices. |
| Middle East-Origin Steel Imports | Immediately reassess all open orders transiting the Strait of Hormuz | War risk premium at 3%–7.5% of cargo value; freight rates up 3–4x since February. Factor in additional USD 55–125/t for alternative routing. |
🔵 For Export Sales Managers
| Strategy | Recommendation | Key Driver |
|---|---|---|
| Domestic China | Maintain firm offers; expect stable-to-firmer pricing through April 30 | The cost-driven floor is solid. The supply-side production discipline narrative supports modest price increases into May. |
| Persian Gulf Markets | Push price increases aggressively to reflect real logistics costs | 40-foot container rates above USD 8,000; war risk premiums at up to 7.5%. Pass these through transparently; do not absorb them. Offer Jeddah + land bridge options as a (marginally) lower-cost alternative. |
| Dubai / Saudi Re-Exporters | Verify that your buyers have secured logistics capacity | Major carriers have suspended services; vessel availability is tight. Deals that cannot be physically shipped should not be booked without confirmed vessel space. |
| EU Markets | Focus on high-value, CBAM-compatible specialty steel | The combination of quota cuts (to 18.3M tonnes) and tariff increases (to 50%) makes commodity-grade steel exports to Europe increasingly uneconomic. CBAM certificate cost of EUR 75.36/t will rise as free allowances phase out. Initiate EPD certification now. |
| Southeast Asia | Actively promote billets, HRC, and pipe | This region is the primary absorber of redirected Chinese tonnage; billet export data (+48.37% YoY in March) confirms the trend. |
| Brazil / South America | Limit exposure; monitor quota utilization | CRC and GI quotas are at high utilization rates; anti-dumping duties in place. |
| Mexico / USMCA Markets | Avoid routing Chinese steel through Mexico to access the US | Tightened rules of origin (April 16) make this route legally unsound. Steel melted and poured outside North America is ineligible for duty-free treatment. |
| Strip Steel Exporters | Continue confidently offering with 13% rebate; verify HS codes | The rebate remains intact for most ordinary grades. But classification errors at the “alloy vs. non-alloy” and “width” boundaries are the most common source of rebate denial. |
Disclaimer: This report is based on publicly available market information and professional analysis as of April 27, 2026. All data and judgments are subject to change as new information becomes available. This does not constitute specific investment or trading advice. Any trading or procurement decision should be made independently, with full consideration of your own risk tolerance, contractual obligations, and professional counsel.
📧 Contact Email: amy@amyinsights.com
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