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Analysis of the Steel Industry (July 2026) and Procurement Reference for the Construction Machinery Parts Sector

Suggested Images: Actual photos of wear-resistant steel plates or raw steel materials for excavator undercarriage parts.

I. Key Trends in Recent Steel Prices and Supply

Data from the national steel market as of mid-July shows that the output of the five major steel product categories in China declined for two consecutive weeks, with a weekly reduction exceeding 210,000 tons. Major steel mills have entered a period of concentrated maintenance due to high temperatures, and total steel inventory decreased by 178,000 tons month-on-month, continuing to alleviate the pressure of previous inventory backlogs.
Spot prices have seen a slight, fluctuating recovery; ex-factory prices for medium-heavy plates and wear-resistant plates rose slightly by 10–30 RMB/ton. While demand for construction steel has entered the traditional off-season, demand from the mining and construction machinery manufacturing sectors remains stable, resulting in a market pattern where “plate steel is strong while long steel is weak.”
On the raw material side, iron ore supply is ample with prices remaining low, whereas costs for coking coal and coke stay high; consequently, the cost of alloy steel raw materials—required for forged parts such as track rollers, drive sprockets, and cutting edges—is unlikely to drop significantly in the short term.

II. Major Changes in Export Trade Policies Affecting Construction Machinery Parts

1. The EU’s Carbon Border Adjustment Mechanism (CBAM) has been fully implemented; additional carbon costs for steel continue to rise in 2026, increasing export costs for ordinary carbon steel by 8%–12%. Parts lacking carbon footprint traceability face steep additional tariffs.

2. The US and Europe have simultaneously tightened steel import quotas and raised tariffs, raising the barrier to entry for traditional Western markets. Consequently, Southeast Asia, the Middle East, and Latin America have become key growth markets for construction machinery parts exports.

3. Industry standards are driving raw material upgrades: overseas buyers are prioritizing undercarriage parts made from low-carbon, high-strength, wear-resistant steel, leading to a gradual decline in orders for standard high-manganese carbon steel.

III. New Technical Developments in Specialized Steel for Construction Machinery

In July, Bengang Steel Plates released a patent for wear-resistant steel specifically designed for construction machinery track links. By optimizing the ratio of chromium and niobium alloys, the wear resistance and fracture toughness of tracks and track rollers have been significantly improved; the service life of this new special wear-resistant steel exceeds that of traditional steel by over 30%. Industry demand is characterized by “weak domestic but strong overseas” trends; domestic excavator sales rose 35.3% year-on-year in June, orders for large overseas mining equipment (such as the PC1250 and ZX870 models) have rebounded, and procurement demand for wear-resistant alloy steel and specialized forging steel continues to rise.

IV. Outlook on Procurement and Industry Trends for the Second Half of the Year

1. Price Trends: Steel prices are expected to fluctuate within a narrow range during July and August; continued production cuts by steel mills will provide a floor for prices, limiting the scope for significant declines. It is recommended that parts manufacturers lock in prices for wear-resistant steel billets through phased procurement.

2. Product Focus: Low-carbon NM-series wear-resistant steel plates and high-strength low-alloy steels will remain the mainstream for long-term exports, helping to avoid the tariff and carbon-related cost risks associated with ordinary carbon steel.

3. Market Strategy: Reduce reliance on single markets in Europe and the US and deepen engagement with infrastructure and mining markets in Southeast Asia and the Middle East; parts featuring high wear resistance and low-carbon certification offer greater price competitiveness.

V. Industry Summary

The steel industry has entered a phase characterized by supply contraction, escalating trade barriers, and a shift toward high-end materials. While profit margins for ordinary low-end carbon steel continue to shrink, the long-term market for high-strength, wear-resistant specialty steels—used in undercarriage components for excavators and bulldozers—remains stable. Parts manufacturers can secure early access to low-carbon steel mill resources and optimize raw material selection to hedge against the dual cost pressures of steel price volatility and overseas carbon tariffs.