China’s steel prices edged down slightly in early August, halting the upward trend observed in July, after the country’s top political advisory committee softened its stance on excessive competition and signaled no imminent monetary easing during its July 30 meeting.

On July 1, Chinese President Xi Jinping emphasized the need to combat “disorderly low-price competition” across domestic industries and called for the “orderly exit of outdated industrial capacity.” This led to significant price increases in some Chinese commodity markets throughout July, including in ferrous products.

However, in an effort to manage market sentiment and rein in price hikes, China’s political bureau on July 30 omitted references to “low-price” and “orderly exit” from its statement addressing intense competition within domestic industries.

According to some steel market participants, the revised statement suggests that China’s campaign against excessive competition will be a long-term and gradual process — shaped by deflationary pressures and a weak labor market — rather than an immediate move to reduce industrial capacity or elevate commodity prices.

Platts-assessed Chinese hot-rolled coil steel prices rose about 10% in July, but have declined by about 1% since the announcement. Platts is part of S&P Global Commodity Insights.

Market sources said Aug. 5 that insufficient domestic demand, limited scope for further reductions in pig iron and steel production, and persistent overcapacity are expected to continue weighing on Chinese steel prices in the second half of 2025.