As supply and demand for construction steel were not fully matched across different markets, regional supply-demand mismatches created price differentiation, which in turn drove the cross-regional circulation of steel resources. When the regional price spread gradient was appropriate, regions with surplus construction steel capacity and production often shipped excess resources out, thereby rebalancing construction steel resources across regions.
In recent years, the annual average price of rebar continued to trend downward, while the game between sellers and buyers became increasingly prominent. Traditional construction steel resource circulation patterns such as “north-to-south steel flow” also adjusted. Let us review what new changes took place in the circulation of construction steel resources.
1. Cross-Regional Construction Steel Circulation:
(1) Exports Replaced Domestic Sales, Forcing Iteration of the Traditional “North-to-South Steel Flow” Model
Looking at historical patterns, north-east China, as a major source region for outbound construction steel resources, mainly shipped to north China, east China, and south China, and these resource flows drew close market attention. Comparing prices in representative cities across different regions and factoring in cross-regional transportation costs, construction steel resources in north-east China only flowed to other regions in phases. According to survey feedback, since 2025, China’s exports of steel billet to the Middle East, Southeast Asia, and other countries were strong, with annual exports reaching 14.83 million mt, up 134% YoY. Many steel mills reduced construction steel production and directly produced steel billet for export. As demand in the north-east region weakened seasonally, local steel mills gained an additional option of exporting steel billet besides digesting production through cross-regional resource circulation, resulting in a clear decline in resources flowing south from the north.
Specifically, from 2023 to 2025, the price spread between Shenyang and Hangzhou and between Shenyang and Beijing widened somewhat, with the spread relatively more obvious in Q3 and Q4. By contrast, the spread with Guangzhou continued to narrow, which was relatively more evident in Q1 and Q4. Construction steel from Shenyang transported to Beijing was mostly shipped by rail, with relatively high transportation costs. Given construction steel resource supply in north China such as Hebei, north-east resources only flowed intermittently into north China when the price spread widened significantly. In east China, there were relatively more construction projects, and market demand showed greater resilience. In Q4 2025, such as in November, as the regional price spread widened, part of the north-east construction steel resources was shipped by sea to Hangzhou, Shanghai, and other places. By contrast, south China, especially Guangdong, had many EAF steel mills with greater production flexibility and could adjust promptly based on market demand. Coupled with weaker end-user demand for construction steel, market prices struggled to open up a clear gap versus north-east prices. As a result, very few north-east resources flowed to south China in 2025. (2) Construction Steel Price Spreads Widened, with "West-to-East Steel Shipments" Emerging in 2025
From 2023 to 2024, the rebar price difference between Hangzhou and Chengdu was not obvious. Given transportation costs, resources from south-west China were rarely shipped to Hangzhou, Shanghai, and other cities in east China. In 2025, the price spread between Hangzhou and Chengdu widened significantly. On the one hand, this was due to adjustments in premiums for rebar specifications in the Chengdu market, which kept Chengdu's base price relatively low (18mm rebar required an additional 80-150 yuan/mt on top of the base price). On the other hand, demand in south-west China remained weak, while the production pace of mainstream steel mills did not slow significantly. Intensified regional competition kept rebar prices in south-west China at a prolonged low level. According to surveys, in Q3 2025, steel mill resources from Yunnan, Sichuan, and other parts of south-west China, such as Sichuan Weigang and Chenggang, were shipped to east China.
2. Regional Construction Steel Circulation:
(1) Hubei-Hunan-Jiangxi: Jiangxi Resources Flowed into the Hubei and Hunan Markets
Judging from rebar price spreads among the provincial capitals of Hubei, Hunan, and Jiangxi, the Wuhan-Nanchang and Changsha-Nanchang price differences were relatively obvious in 2025. According to market surveys, construction steel resources from Jiangxi producers such as Pinggang were shipped into the Hubei and Hunan markets.
(2) Shanxi-Shaanxi-Henan: Shanxi Resources Flowed into the Shaanxi and Henan Markets
Judging from rebar price spreads among the provincial capitals of Shanxi, Shaanxi, and Henan, city-to-city price spreads fluctuated unstably. However, according to market surveys, Shanxi had many construction steel mills, while local demand absorption capacity was limited. At the same time, many steel mills were closer to Henan and Shaanxi, giving them a freight cost advantage over shipping to Taiyuan, Shanxi. As a result, many Shanxi resources, including Jingang Group, Shanxi Jianlong, and Shanxi Jianbang, were supplied to the Henan and Shaanxi markets.
(3) Beijing-Tianjin-Hebei: Hebei Resources Flowed into Tianjin and Beijing
Judging from rebar price spreads among cities in the Beijing-Tianjin-Hebei region, in most cases there was a relatively stable price spread for Beijing-Shijiazhuang and Tianjin-Shijiazhuang, ranging 0-100 yuan/mt. It was understood that there were very few construction steel producers in Beijing and Tianjin, and most resources were supplied by Hebei steel mills such as Jinggang and Chenggang.
(4) Yunnan-Guizhou-Sichuan-Chongqing: Yunnan Resources Flowed into Guiyang, and Sichuan and Chongqing Resources Were InterchangeableFrom the perspective of rebar price spreads among the provinces and cities of Yunnan, Guizhou, Sichuan, and Chongqing, there is a certain price spread between Guiyang and Chengdu. Resources from Yunnan, such as Yukun and Chenggang, are supplied to Guizhou. Price spreads within the Sichuan and Chongqing markets are not obvious, and resources circulate between them relatively frequently.
3. Insufficient Domestic Demand Coupled With Export Diversion Cools Cross-Regional Circulation of Construction Steel
For a long time, cross-regional transfers such as “north-to-south shipments” and “west-to-east shipments” have generally faced issues including long transportation cycles, a strong dependence on temporary price spreads, and numerous variables and risks. In response, steel mills in Northeast China have increasingly chosen to adapt measures to local conditions and optimize their product mix, treating long steel exports as an important breakthrough point, mainly exporting steel billet and supplementing this with sheets & plates such as strip steel, thereby easing the pressure from the seasonal supply-demand mismatch in construction steel. This has also led to a continued contraction in the volume of traditional inter-regional resource flows. Looking ahead to 2026, as steel mills in China accelerate their expansion outside China and continue to deepen development of markets outside China such as Southeast Asia and the Middle East, steel billet export volumes are expected to remain high, and the volume of resources involved in “north-to-south shipments” is expected to decrease rather than increase.
From the perspective of circulation within regions in China, on the supply side, steel mills across various regions have basically met green environmental protection requirements, and barring unexpected accidents, the overall production pace remains stable; on the demand side, the market is still characterized by a property downturn and limited support from large-scale infrastructure projects. Most provinces and cities are unlikely to see a significant supply-demand mismatch, regional price spreads are unlikely to widen, and internal resource circulation is also showing a contracting trend.
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