Date: March 1, 2026
By: Amy
As China’s markets reawaken after the Lunar New Year, the interaction between rebar futures and the physical billet market is a critical barometer for steel buyers. In late February, market sentiment was shaped by a tug-of-war between post-holiday restocking and persistent inventory pressure.
Early in the week following the holiday, SHFE rebar futures climbed, buoyed by policy support and the anticipation of restocking demand. This firmness provided crucial support to billet prices, with Tangshan ex-works prices holding steady around 2,930 RMB/ton . However, this upward momentum was capped by the reality of high social and mill inventories. Total billet inventory accumulation continues to exert pressure, preventing a sharp rally .
The underlying dynamics are shifting. The new export license system is poised to alter this relationship. By raising compliance costs and favoring higher-value products, the policy is expected to reduce the outflow of low-priced, semi-finished goods like billet . This could lead to a structural increase in domestic availability, potentially softening the correlation between export-driven price surges and futures volatility.
For procurement managers, this suggests a market that is floor-supported but ceiling-capped in the near term. Futures rallies may be less potent in driving up physical billet prices if domestic inventories remain high due to the redirected export flow. Watching the Tangshan inventory drawdown rate against futures movements will be key to understanding the true post-holiday demand pulse.