Steel Prices Surge
Date:2026-03-19
Since the beginning of March, the domestic steel market has reversed its post-Spring Festival slump, experiencing a volatile upward trend. As of March 13, the China Steel Price Index (CSPI) stood at 91.51 points, a week-on-week increase of 1.21%. The main contracts for rebar and hot-rolled coil rose by 3.8% and 3.1% respectively compared to their post-Spring Festival lows. However, this surge is not driven by a strong recovery in demand, but rather by global cost-push inflation triggered by a geopolitical conflict in the Middle East. From the conflict in the Strait of Hormuz to iron ore freight rates in Western Australia, and then to price adjustment notices from domestic steel mills, a price transmission affecting the entire industry chain is unfolding.
The Gulf's "oil choke point" is choked, providing strong support for costs. The first domino to drive this round of steel price increases has fallen on the Strait of Hormuz, a vital global energy choke point. Since early March, shipping through the strait has been disrupted, directly triggering severe turbulence in the global energy market, with international crude oil futures prices briefly exceeding $110 per barrel.
The surge in oil prices quickly transmitted to upstream steel production. Fuel costs account for 40%-60% of shipping operating costs, and rising crude oil prices directly increased the cost of transporting iron ore by sea. As of March 13, iron ore shipping costs from Australia and Brazil to China had rebounded by approximately 24% compared to early March. Meanwhile, there is a price ratio between crude oil and coal; when crude oil prices remain high, thermal coal prices may follow suit, indirectly pushing up prices for coking coal, ferroalloys, and other commodities.
To make matters worse, while energy costs rose, there were also disruptions on the raw material supply side. According to research reports from several securities firms, long-term contract negotiations between China Mining Group and mining giant BHP Billiton have encountered setbacks, with purchases of some mainstream minerals restricted, leading to a structural shortage of tradable resources at ports and further pushing up iron ore prices. By mid-March, the price of PB fines at Qingdao Port had surged to around 800 yuan/ton.
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