[Industry Analysis] The November steel PMI came in at 48%: Industry operations have slowed somewhat, and the characteristics of the off-season are gradually becoming more apparent.

According to the steel industry PMI survey and release by the Specialized Committee on Steel Logistics of the China Federation of Logistics and Purchasing, the index for November 2025 stood at 48%, down 1.2 percentage points from the previous month, indicating a slight slowdown in industry operations. The changes in individual sub-indices show that steel demand has slightly rebounded, while steel mill production has slowed somewhat, inventory levels have begun to decline, raw material prices remain high, and steel prices have experienced minor fluctuations. Overall, the industry’s off-season characteristics are gradually becoming more apparent. It is expected that in December, steel demand will likely remain stable with a downward trend, steel mill production will contract moderately, raw material prices will ease from their high levels, and steel prices will stabilize amid fluctuating movements.

According to the steel industry PMI survey and release by the Specialized Committee on Steel Logistics of the China Federation of Logistics and Purchasing, the index for November 2025 stood at 48%, down 1.2 percentage points from the previous month, indicating a slight slowdown in industry operations. The changes in individual sub-indices show that steel demand has slightly rebounded, but steel mill production has slowed down, inventory levels have begun to decline, raw material prices remain high, and steel prices have experienced minor fluctuations. Overall, the industry’s off-season characteristics are becoming increasingly evident. It is expected that in December, steel demand will likely remain stable with a downward trend, steel mill production will contract moderately, raw material prices will ease from their high levels, and steel prices will stabilize amid fluctuating movements.

 

Changes in the Steel Industry PMI Since 2020

Pan Fujie, Director of the Specialized Committee on Steel Logistics under the China Federation of Logistics and Purchasing, believes that in November, demand for accelerated construction surged as some key infrastructure and housing projects stepped up their pace. Meanwhile, manufacturing demand for steel remained relatively stable, leading to a slight improvement in domestic steel market demand. However, the overall real estate market continues to perform weakly, exports have experienced some fluctuations, and overall steel demand remains insufficiently unleashed, leaving the industry’s growth momentum still relatively weak. Affected by limited improvements in demand, tighter environmental production restrictions during the northern heating season, and shrinking profit margins, steel mills’ production activities have slowed somewhat. Nevertheless, this slowdown in production is beneficial for digesting finished-product inventories, easing pressure from inventory buildup. As production slows, demand for raw material procurement has also declined accordingly, causing raw material prices to fluctuate at high levels without significant relief from cost pressures. Steel prices have shown a mild, narrowing range of fluctuations, yet persistently rising costs continue to squeeze steel mills’ profit margins further. With December entering the traditional off-season, the north fully entering winter, ongoing drag from the real estate sector, and continued enforcement of environmental production restrictions, the steel industry’s supply and demand sides are likely to maintain a weak equilibrium, and operational pressures will persist.

Market demand has shown a slight rebound, yet the industry’s growth momentum remains insufficient. November marks the transition period from the traditional peak season to the off-season for the steel industry. Some key infrastructure and housing construction projects have accelerated their pace to meet deadlines, and construction conditions in southern regions have remained relatively stable. Coupled with the relatively steady demand from the manufacturing sector for critical raw materials, steel demand has exhibited a modest recovery trend. However, the real estate sector as a whole continues to operate weakly, with newly started construction areas continuing to decline and the rate of project funding being secured gradually slowing down, thus limiting the boost steel demand can receive. Under the influence of these factors, domestic steel market demand remains underutilized, and the industry’s growth momentum continues to be weak. The new orders index stood at 48.9%, up 1.3 percentage points from the previous month, continuing its upward trend but still remaining in the contraction range, indicating that while demand has slightly warmed up, the overall recovery remains relatively weak. Exports have also experienced some fluctuations: due to generally weak overseas market demand and a tightening international trade environment, China’s steel exports have contracted somewhat. After the new export orders index rose into the expansion range last month, it has once again fallen below 50%. On the end-user demand side, according to information from Shanghai Zhuoganglian, domestic end-user demand saw a slight improvement in November. Taking Shanghai’s terminal rebar procurement as an example, November’s demand increased slightly by 9.1% month-on-month, showing reasonably good performance.

Changes in the New Steel Orders Index Since 2020

 

Changes in Weekly Procurement Volume of Rebar at Shanghai Market Terminals Since 2020

Steel plant production has slowed somewhat, and inventories of finished products have begun to decline. In November, although demand showed some signs of recovery, as the off-season approached and environmental restrictions on production in northern regions gradually tightened, some steel plants adjusted their production rhythms. The steel industry’s production index came in at 46%, down 3.8 percentage points from the previous month, ending the earlier upward trend and indicating a slowdown in steel plant production activities. According to data from the China Iron and Steel Association, in early November, key steel enterprises averaged daily crude steel production of 1.926 million tons, a decrease of 5.5% from the same period last month; average daily pig iron production was 1.804 million tons, down 3.9% from the same period last month; and average daily steel product output was 1.884 million tons, down 4.1% from the same period last month. By mid-November, the average daily crude steel production of key steel enterprises had fallen to 1.943 million tons, a decrease of 3.7% from the same period last month; average daily pig iron production stood at 1.797 million tons, down 2.9% from the same period last month; and average daily steel product output reached 1.924 million tons, down 2.7% from the same period last month. With production activity slowing and demand showing a modest rebound, steel plant inventories of finished products have started to decline. The finished goods inventory index came in at 49.1%, down 2.6 percentage points from the previous month, ending the previous three-month streak of expansion and returning to the contraction range. According to data from the China Iron and Steel Association, as of mid-November, the steel inventory held by key enterprises totaled 15.61 million tons, a decrease of 5.9% from the same period last month.

 

Changes in the Steel Production Index Since 2020

 

Changes in the Finished Steel Products Inventory Index Since 2020

Raw material prices have been fluctuating at high levels, and the pressure on steelmaking costs continues to intensify. In November, affected by a slight slowdown in production activities, steel mills’ procurement of raw materials also contracted accordingly, with the purchasing volume index coming in at 46.3%, down 2.5 percentage points from the previous month. Despite this, raw material prices for steelmaking remain persistently high; the index of purchase prices has stayed in a high range for six consecutive months, and upward price pressures show no signs of easing. By product category, prices of various steelmaking raw materials continued to diverge: iron ore prices experienced mild fluctuations; electric furnace production remained limited, and demand for scrap steel was insufficient, causing scrap steel prices to trend weakly; coking coal supplies remained tight, driving coking coal prices higher, and after the fourth price hike of the month took effect, the cumulative increase widened. Overall, although steel raw material market prices showed some divergence in November, they generally remained at high levels, and the pressure on steelmaking costs continued to be prominent.

 

Changes in the Steel Purchase Price Index Since 2020

Steel prices experienced slight fluctuations, while profit margins continued to narrow. In November, although domestic steel demand showed a modest rebound, the overall recovery remained insufficient. Coupled with a slowdown in production, steel mills actively worked to reduce inventories. Under the combined influence of multiple factors, steel market prices saw a slight but volatile rebound. According to the Shanghai rebar price index, the price on November 3 stood at 3,149 yuan per ton, after which it fluctuated throughout the month. On November 11, the price dropped to 3,112 yuan per ton—the month’s lowest point—while on November 25, it rose to 3,175 yuan per ton—the month’s highest point. The monthly price range was only 63 yuan per ton. Despite the slight recovery in steel prices, rising raw material costs continued to put downward pressure on steel mills’ profit margins.

 

Changes in the Shanghai Rebar Price Index Since 2018

In December, steel demand is expected to show a trend of steady decline with some fluctuations. On the one hand, positive factors supporting demand still have room to exert their effects: infrastructure projects are entering the final sprint toward their annual targets; “dual-drive” projects backed by ultra-long-term special government bonds are accelerating; and many regions are expediting construction schedules through winter work safeguards, ensuring that demand for construction materials remains relatively resilient in early December. Meanwhile, the “trade-in” policy for manufacturing continues to gain momentum, and end-of-year restocking demand in the automotive and home appliance sectors remains strong, providing support for plate steel demand. Additionally, industrialization efforts in emerging overseas markets are generating rigid demand, contributing to some extent to the growth in external demand. On the other hand, however, the drag from the real estate sector has yet to improve. From January to October, newly started real estate construction area fell by 14.7% year-on-year, housing starts declined by 9.8%, and funds received by real estate developers dropped by 9.7% year-on-year. The industry’s tight liquidity situation has not been fundamentally reversed; property developers remain reluctant to acquire land or commence new projects, leaving demand for construction steel lacking effective growth drivers. Seasonal demand is weakening and entering a deeper phase; northern regions are about to enter the permafrost period, and low temperatures are further expanding the scope of construction site shutdowns. Overall, steel demand in December is likely to show a trend of steady decline with some fluctuations. While infrastructure projects’ year-end rush and policy-supported manufacturing demand will provide short-term support, the continued weakness in real estate and seasonal weather constraints will keep demand on a downward trajectory.

Steel mills continued to experience a moderate contraction in production. In December, the environmental production restrictions during the northern heating season deepened further, with enhanced and differentiated control measures implemented in key regions. As a result, the proportion of blast furnaces and converters subject to production limits at some steel mills increased. Coupled with the onset of the traditional off-season on the demand side and downward pressure on steel prices, profits remained persistently low, leaving steel mills with insufficient willingness to produce. The index of steel mill business activity expectations stood at 36.2%, down 1.7 percentage points from the previous month, remaining below 40% for two consecutive months—a level indicating that companies continue to hold a cautiously optimistic outlook for the future. Under the combined influence of environmental production restrictions, profit pressures, and cautious corporate expectations, the contraction trend on the supply side is expected to persist.

Raw material prices have slightly declined, and steel prices have stabilized after experiencing fluctuations. In December, as steel mills’ production expectations shrink, demand for raw material procurement will remain weak, and overall raw material prices are expected to continue falling. Regarding iron ore, port inventories remain persistently high, and steel mills have slowed their purchasing pace, suggesting that prices may fluctuate at lower levels. After several rounds of price hikes earlier, coking coal prices now have limited room for further increases. Scrap steel volumes may see a seasonal decline during winter, but with weak demand from steel mills, scrap steel prices are likely to remain stable with a slight downward trend. Overall, steelmaking costs are expected to show a downward trend. As for steel prices, after a period of volatile bottoming-out, there is insufficient room for further declines. Coupled with the end-of-year inventory replenishment demand from some traders, steel prices are likely to break free from their prolonged volatile phase and stabilize amid fluctuations. Some steel grades may even experience a modest rebound; however, constrained by the off-season demand, the magnitude of these rebounds will be limited, making it difficult for prices to sustain a clear upward trend.
 

Reprinted from: World Metal Bulletin

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