China’s steel market had little to cheer from the government’s economic blueprint for 2026, with stimulus measures failing to exceed last year’s support levels — leaving concerns about modest demand recovery despite supply-side constraints that could underpin prices.

Premier Li Qiang’s work report to the National People’s Congress on March 5 set a GDP growth target of 4.5%-5% for 2026, down from 5% in 2025, while consumer goods trade-in subsidies were cut to Yuan 250 billion ($36.25 billion) from Yuan 300 billion.

The quota for new local government special bonds remained unchanged from 2025, and the official stance on property shifted to “stabilizing the property market” from more vigorous development language used last year, according to the report.

China-based market participants, including mill sources, traders, and industrial analysts, said that, due to the lack of strong stimulus policies, the recovery in steel demand over the next few months is expected to be modest.

However, as both China’s current steel production and market inventories are at relatively low levels, and the government work report also mentions that this year will see “a thorough rectification of involution,” these factors could support China’s steel prices on the supply side, the participants said.