[SMM Hot Topic] Rebar Base Price "Exists in Name Only," Pricing System Has Completely Changed

I. Base Prices Completely "Out of Focus," Market Seeking More Refined and Precise Price Discovery Mechanisms

Since Q2 2026, steel mills in regions such as Yunnan-Guizhou-Sichuan-Chongqing, the three northeastern provinces, and Shanxi-Shaanxi-Henan have frequently adjusted base price premiums and price spreads between specification groups. Some steel mills adjusted their premium rules 3–4 times within a single week. The most chaotic situation at present is that the consensus on base prices for mid-range specifications — the national pricing anchor — has completely fallen apart. Previously, Φ18, Φ20, and Φ22 were simply used as benchmark prices, but now regions including Shandong, Xi'an, Nanchang, and Sichuan and Chongqing all impose additional premiums on top of the traditional base price specifications, with premiums ranging from 40–210 yuan/mt (and still fluctuating).

The high-frequency price adjustments have completely overturned the previous pricing logic. Under the old price system, mid-range specifications served as the base price, with price spread adjustments applied, and actual prices in most regions would be reduced by the "online discount." The disruption of the previous pricing mechanism reflects market evolution — steel mills are pricing segmented products more precisely and have a stronger demand for price discovery, while the old mechanism of"base price – online discount + specification spread + brand spread"can no longer meet the market's pricing needs.

II. Industry Chain Profits Reshaped — Who Foots the Bill?

Steel mills are no longer simply adjusting the base price model; this is a revolution reshaping bargaining power across the industry chain, directly affecting the entire chain with clear impacts on upstream, midstream, and downstream participants. The most direct perspective is fromcost and profit.

• From the supply side,

for steel mills, this is both a profit defense battle and one that actually conceals "hidden maneuvers."Through the base price premium model, steel mills are effectively raising actual ex-factory prices. On the surface, this avoids the market panic triggered by directly raising base prices, while also allowing flexible adjustment of profit margins across different specifications — shifting from the previous targeted management of mid-range specifications toward vertical adjustment through specification premiums. However, the market may overlook one issue: whether the brand equity that steel mills have built over many years could collapse at this very moment. According to market sources, after multiple rounds of premium adjustments in Zhengzhou, Xi'an, Nanchang, and Sichuan and Chongqing, the price spreads between steel mill brands have narrowed or even reached parity, and the previously market-accepted brand spreads have gradually weakened. Furthermore, while base price premium rules are being progressively raised, if premiums for large and small specifications are not adjusted in a timely manner, this effectively narrows the price spread between those specifications and mid-range specifications.

• From the distribution side,

the market needs a more transparent, efficient, and precise pricing benchmark.Group premiums are adjusted at irregular intervals — up to 2–4 times a week in the most frequent cases — increasing the difficulty for agents in locking in prices and managing inventory. Many traders have been forced to suspend taking orders and recalculate costs, as even a slight miscalculation could lead to losses. Moreover, because some steel mills in certain markets have made adjustments while others have not, prices from different steel mills have lost comparability. Traders must incur higher transaction costs to understand actual transaction conditions, while their room for price negotiation has shrunk, leaving them to passively absorb rising costs.

III. The Core Driver of Base Price ReformIs the Evolution of China's Steel Supply Chain

Over the past 20 years, the steel supply chain has operated on a dealer model, transferring inventory risk through dealers while steel mills focused on expanding scale and mass production. This supply chain division of labor had its historical rationale. However, since 2022, the real estate sector has entered a downcycle, steel consumption has hit bottom and stabilized, infrastructure steel demand has remained resilient, but the steel consumption structure has changed, with domestic demand showing few bright spots. In 2026, steel mills in China continued to be in a phase of "restructuring" and "adjustment," with capacity controls continuing. Some steel mills have essentially added new specialty and high-quality wire lines or shifted to producing specialty steel products, and rebar production has continued to shrink. More critically, over the past two years, traders have generally operated with low inventory,causing the midstream buffer function to fail and requiring steel mills to be more flexible in adjusting supply.

China's steel market is undergoing a "belated" supply chain evolution, and the direction of this evolution is "produce based on sales" — an iteration from "scale competition" to "product competition." The tools regulating this shift are benchmark prices and specification price spreads that reflect actual market transactions. As produce-based-on-sales takes hold, the online discounts and brand spreads in the market will be re-evolved into a pricing model of "full-specification refined adjustment."

IV. SMM Remains Committed to Fairness, Providing the Industry with Objective and Neutral Price Benchmarks

SMM has been deeply engaged in the metals industry for decades, consistently upholding the principles of objectivity, neutrality, pragmatism, and rigor. SMM adheres to actual market transactions as the core basis for price assessments, relying on a mature price assessment methodology and a comprehensive data system to continuously deliver standardized market benchmarks for upstream and downstream participants across the industry chain. This provides solid support for industry pricing standards, transaction settlement, and business decision-making, serving as a long-term partner in the steady development of the metals industry.Construction steel has entered the starting point of a new cycle. Market prices are shedding old patterns and returning to fundamentals, steadily evolving toward greater authenticity, simplicity, and alignment with international logic. Amid the wave of industry transformation, a price system that can truly reflect spot cargo conditions and serve as a simple, reliable reference may be exactly what the market needs and aspires to most right now.

Data Source Disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.

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