China’s steel market outlook for the short to medium term remains subdued amid expectations of limited domestic demand from the property and automobile sectors, which is likely to temper any upside from policy measures set to be announced this month, sources told S&P Global Commodity Insights in early July.

According to mill and trade sources, steel demand in China’s infrastructure and manufacturing sectors may improve in the second half of 2024, but the property sector may continue to weaken, lowering its steel demand. China’s property sector accounts for around 30% of national steel demand.

China’s steel futures market has seen some support since late June mostly on the back of expectations that a series of measures to reboot economic growth may be announced in mid- July during the country’s top policy makers’ conference.

The most actively traded October rebar contract on the Shanghai Futures Exchange increased from Yuan 3,522/mt ($484/ mt) on June 24 to Yuan 3,616/mt ($497/mt) on July 4, exchange data showed.

However, some market participants pointed out that the central government has become more tolerant towards relatively slower economic growth and therefore drastic stimulus for property, infrastructure or consumer spending is unlikely.

Overall steel demand in 2024 still seems unlikely to surpass levels in 2023, said the mill and trade sources. As the domestic steel demand is likely to remain sluggish for the second half of 2024, the market trend will still depend on how strictly the steelmakers can rein in their steel production, market sources said.