Analysis of global steel price trends and purchasing strategy guide in the second quarter of 2025

Against the backdrop of uneven global economic recovery and frequent adjustments in trade policies, the steel market in the second quarter of 2025 presents a complex and changing pattern. This article will deeply analyze the current price trends, influencing factors and future trends of the global steel market, and provide practical procurement strategy recommendations for different types of companies. From tariff policy shocks to changes in supply and demand patterns, from fluctuations in raw material costs to regional market differentiation, we will comprehensively interpret the current status and future of the steel market to help procurement decision makers seize opportunities and avoid risks in a challenging market environment.

Overview of the current status of the global steel market
In the second quarter of 2025, the global steel market continued the volatile downward trend since the beginning of the year, showing the typical characteristics of "weak reality and weak expectations". According to the latest market data, since mid-May, prices in major global steel markets have generally declined, with spot prices of hot-rolled coil (HRC) in China, the United States, Germany and India falling by 2%, 3%, 4% and 1% respectively10. This synchronous decline reflects the prevalence of weak global steel demand, especially in traditional manufacturing and construction.

There are obvious regional differences in prices. As the world's largest steel producer and consumer, China's domestic steel prices have fallen to around the integer mark of 3,000 yuan/ton, and there is no sign of stopping the decline. The market has even begun to discuss whether it will further drop to 2,800 yuan/ton1. In contrast, although the steel price in the Indian market has fallen, it is still higher than the import parity level, showing a certain price resilience10. The European market has been hit by high energy costs and weak demand, and the downward pressure on prices is particularly significant.

From the perspective of product structure, different steel varieties have differentiated performance. Construction steel (long products) has a relatively stronger trend than plate products due to infrastructure policy support and seasonal factors7. The plate market is greatly affected by fluctuations in demand for manufacturing industries such as automobiles and home appliances and changes in export policies. It is particularly noteworthy that plate products such as hot-rolled coils face anti-dumping tax pressure in Southeast Asian markets such as Vietnam, with tax rates as high as 19.38%-27.83%, which directly affects about 8% of China's steel exports3.

Inventory dynamics show that the market is cautious. At the end of the first quarter, although the in-plant inventory of Chinese steel production enterprises decreased compared with the previous quarter, it was still at a high level year-on-year, and the social inventory pressure should not be ignored8. Traders generally adopt the strategy of "low inventory and fast turnover", reflecting the industry's cautious attitude towards short-term economic recovery. This change in inventory structure has exacerbated the mismatch between supply and demand between steel mills and end users, making the price transmission mechanism more complicated.

From the perspective of profit distribution in the industrial chain, the total profit of China's ferrous metal smelting and rolling processing industry in the first quarter of 2025 was 7.51 billion yuan, turning from loss to profit year-on-year, but the profit margins of the trading link and rough processing link were extremely low, and the profits of various links in the market were severely differentiated1. This differentiation shows that under the current market environment, large steel companies with a complete industrial chain layout have relatively strong risk resistance, while intermediate traders face greater operating pressure.

Analysis of core factors affecting prices
The impact of tariff policy has become the most significant influencing variable in the steel market in 2025. After the United States imposed a 25% tariff on my country's steel and aluminum products in February, Vietnam, South Korea and other countries successively launched anti-dumping investigations on Chinese steel, and the global trade environment has deteriorated significantly13. Although China's steel exports still maintained a year-on-year growth of 8.2% in January-April, reaching 37.891 million tons, this was mainly due to the "export rush" effect and the 90-day "golden buffer period" obtained by 75 countries including Vietnam1. With the introduction of policies such as the US threat to impose a 50% tariff on the EU and a 25% tariff on Apple products in May, global trade tensions have further escalated, casting a shadow on steel exports in the second half of the year1. It is particularly noteworthy that Vietnam's temporary anti-dumping duties on Chinese hot-rolled coils took effect on March 8, with a tax rate of 19.38%-27.83%, which directly affected China's annual hot-rolled coil exports of about 8.14 million tons3.

Changes in supply and demand fundamentals should not be ignored. On the supply side, despite the frequent news of crude steel reduction policies in the market, China's crude steel output in January-April 2025 still reached 345.351 million tons, an increase of 1.68 million tons year-on-year1. If the rumored reduction of 50 million tons for the whole year is calculated, 51.68 million tons will need to be reduced from June to December, which is difficult to achieve1. The demand side presents a pattern of "weak inside and worried outside": the newly started area of ​​domestic real estate in January and February decreased by 29.6% year-on-year, the lowest value in the past five years; although infrastructure investment increased by 9.95% year-on-year, the growth rate excluding electricity was only 5.6%, which had limited pull on steel demand3. Overseas demand is also affected by tariff policies and economic slowdown, and the outlook is not optimistic.

The downward shift in raw material costs is an important force driving steel prices down. At present, the raw coal inventory of 523 mines is about 6 million tons, which is 1-2 times that of recent years. The tone of the "supply guarantee" policy in the coal industry determines that the possibility of production restrictions is low1. Coking coal prices continue to hit new lows, and iron ore is also under pressure due to expectations of increased shipments and arrivals. It has broken through a small range of fluctuations yesterday and is expected to continue to fall1. Data from May showed that the price of high-quality hard coking coal fell by 5% from the previous quarter, and the price of seaborne iron ore fell by 8-9%10. The overall weakening of the raw material side provides downward space for steel prices, but also squeezes the profits of mines and coking enterprises.

The impact of macroeconomic policies is becoming increasingly prominent. Domestically, the "stabilizing growth" policy continues to exert its strength, and measures such as urban renewal actions and accelerated issuance of special bonds are expected to have a marginal impact on steel demand9. However, it will take time for the policy effect to be transmitted to steel demand. From January to April, the funds in place of real estate developers fell by 4.1% year-on-year, which restricted the recovery of new construction9. Internationally, the expectation of interest rate cuts by the Federal Reserve has weakened, and the US dollar has maintained a strong pattern, which has aggravated the pressure of capital outflows from emerging markets and indirectly affected the demand for steel in these regions.

Seasonal factors are obvious in the second quarter. Traditionally, the second quarter is the peak season for construction in the northern hemisphere. In mid-to-late April, construction sites usually resume work in a concentrated manner, driving the demand for building materials to rebound7. However, the seasonal rebound in 2025 is weaker than in previous years. After May, demand weakened again, showing the characteristics of "first rise and then decline"7. This is closely related to structural factors such as the continued downturn in real estate and the low rate of capital in place for infrastructure.