Posted on 08 May 2025
As China enters a traditional off-month for steel consumption in May, hot-rolled coil (HRC) prices are showing clear signs of weakening. However, the decline may be gradual in the short term, with moderate supply growth and relatively resilient demand helping to limit the severity of the price drop, Mysteel's latest monthly report on the commodity suggests.
In April, sentiment throughout China's ferrous market deteriorated as more Chinese exports, including those of steel, were penalized by higher tariffs. Domestic prices of major ferrous products including rebar and iron ore declined broadly, with HRC also coming under pressure.
For May, China's spot price of Q235B 4.75mm HRC in Shanghai under Mysteel's assessment is expected to decrease by 1.7% on month to average Yuan 3,210/tonne ($444/t) including the VAT, less severe than April's 3.3% loss compared with March.
While steel export orders declined overall during April amid the rise in trade tensions, prices of Chinese HRC remained relatively competitive internationally, helping to moderate the pace of the pullback, the report notes.
For this month, Mysteel suggests that China's planned HRC export volume may decline by 5.8% on month to sit at around 1.09 million tonnes, with the size of the decline widening by 2.5 percentage points compared with April.
Meanwhile, China's domestic HRC consumption is expected to remain relatively stable in May, supported by steady demand from the manufacturing sector, the report suggests.
For example, this month's scheduled production of China's three most popular home appliances – air-conditioners, refrigerators and washing machines – is projected to rise 6% on year to total 38.21 million units, according to ChinaIOL.com, a leading domestic information provider serving the home appliance and refrigeration industries.
Notably, the Chinese Politburo meeting held in late April in Beijing pledged to support economic growth and to accelerate the issuance and use of ultra-long special treasury bonds. As related funds begin to be deployed for equipment upgrades and trade-in programs, key manufacturing sectors such as home appliance and automobile production are likely to benefit, potentially driving additional hot-rolled coil consumption, the report noted.
Faced with weaker export prospects and thinning margins, many Chinese steelmakers are showing less willingness to ramp up production for now, with many steelmakers and re-rollers planning to schedule maintenance on their hot strip mills this month. The short-term moderate gains in supply should help limit the downward pressure on HRC prices, according to the report.
Average HRC output among the 37 sampled HRC makers may stay largely flat on month to average 3.16 million tonnes per week in May, Mysteel's report predicts.
Source:Mysteel Global
