Weekly Data Update on China's Steel and Iron Ore

Overview

This is Morgan Stanley's weekly data update on China's steel and iron ore (as of June 18, 2026). The report primarily tracks the month-on-month changes in high-frequency indicators such as steel consumption, production, inventories, iron ore inventories, and shipments, providing investors with a reference for short-term industry sentiment shifts. Overall, this week's data shows marginal improvements on both the demand and supply sides of steel.

Core views

**Demand Side:** Apparent consumption of long products rose by 5.1% month-on-month, and sheet production rose by 2.0% month-on-month, indicating a short-term recovery in steel demand from construction and manufacturing sectors. However, year-on-year, long product consumption fell by 0.3%, and sheet consumption fell by 2.1%, suggesting that demand remains weaker than the same period last year. **Supply Side:** Weekly production of both long products and sheets increased month-on-month, with long product output up 2.7% and sheet output up 0.5%. In terms of capacity utilization, the overall capacity utilization rate of 247 sampled steel mills reached 90.3%, up 0.1 percentage point month-on-month; electric furnace (EAF) capacity utilization saw a more significant increase, rising by 2.0 percentage points to 64.4%, and was 7.7 percentage points higher year-on-year, indicating a marked improvement in the production enthusiasm of short-process steel mills. **Inventory Side:** Social steel inventories (trader inventories) fell by 0.6% month-on-month but were 23.3% higher year-on-year; steel mill inventories rose slightly by 0.7% month-on-month but were 1.3% higher year-on-year. On the iron ore side, port inventories rose by 0.7% month-on-month, while steel mill inventories fell by 1.2% month-on-month, indicating a temporary weakening in steel mills' willingness to replenish stocks. **Iron Ore Supply:** During the week of June 8–14, combined shipments of iron ore from Australia and Brazil rose by 5.9 million tons month-on-month. However, Australian shipments fell by 1.64 million tons month-on-month, while Brazilian shipments rose by 2.24 million tons month-on-month, showing an overall recovery trend in supply.

Analysis framework

The report adopts a typical weekly supply-and-demand database analysis framework, tracking high-frequency indicators such as Mysteel’s reported apparent steel consumption, production, inventories, capacity utilization, as well as iron ore inventories and shipments, comparing month-on-month and year-on-year changes to depict short-term sentiment shifts in the steel industry chain. This approach enables investors to quickly grasp recent marginal turning points in the industry (such as whether demand is improving, production is expanding, or inventory pressures are easing).

Methodology notes

• Industry/Industrial Analysis FrameworkSupply-and-Demand Framework

  Supply-and-Demand Framework

  The report tracks weekly changes in steel production (supply side) and apparent consumption (demand side) to assess the short-term supply-and-demand dynamics of the industry. For example, this week’s consumption rebounded month-on-month but remained down year-on-year, indicating that demand has improved in the short term but has not yet reversed.

• Industry/Industrial Analysis FrameworkVolume-price decomposition

  Volume-Price Decomposition

  The report breaks down the steel industry chain into two segments—steel (long products/sheets) and iron ore—and separately observes volume and price indicators such as production, inventories, and consumption to assess upstream-downstream transmission effects.

Key data

• Apparent Consumption of Long Products3,069 ktUp 5.1% month-on-month, down 0.3% year-on-year
• Apparent Consumption of Sheets5,643 ktUp 2.0% month-on-month, down 2.1% year-on-year
• Electric Furnace Capacity Utilization Rate64.4%Up 2.0 percentage points month-on-month, up 7.7 percentage points year-on-year
• Capacity Utilization Rate of 247 Steel Mills90.3%Up 0.1 percentage point month-on-month, down 0.5 percentage point year-on-year
• Social Steel Inventories (Traders)11,259 ktDown 0.6% month-on-month, up 23.3% year-on-year
• Steel Mill Inventories4,311 ktUp 0.7% month-on-month, up 1.3% year-on-year
• Iron Ore Port Inventories157,070 ktUp 0.7% month-on-month
• Iron Ore Steel Mill In-Plant Inventories225 kt/ton (per mill)Down 1.2% month-on-month
• Daily Steel Production from Mills397 ktUp 1.2% month-on-month
• Australian Iron Ore Shipments-1.64 MtDown month-on-month
• Brazilian Iron Ore Shipments+2.24 MtUp month-on-month
• Combined Australian and Brazilian Iron Ore Shipments+0.59 MtUp month-on-month (week of June 8–14)

Impact & implications

The report does not directly interpret the meaning of the data. Judging from the data itself, there are positive marginal changes on both the steel consumption and production sides, especially the sharp rise in electric furnace utilization rates, which suggests improved profitability or increased scrap steel supply. However, inventories (especially social inventories) remain relatively high year-on-year, and demand continues to decline year-on-year, indicating that the industry’s overall sentiment is still in a recovery phase and has not yet formed a sustained reversal. On the iron ore side, fluctuations in Australian and Brazilian shipments may have some impact on short-term iron ore prices, but steel mills’ willingness to replenish stocks remains weak.