Posted on 18 Sep 2025
The price spread between hot-rolled coil (HRC) and rebar in China's domestic market has been expanding steadily over the past two months, mainly due to the healthier fundamentals of HRC compared with those of rebar, Mysteel Global learned.
On September 16, Mysteel assessed China's national average price of Q235 4.75mm HRC at Yuan 3,467/tonne ($488/t) including the 13% VAT, while that of HRB400E 20mm dia rebar was assessed at Yuan 3,309/t including the VAT, with the price spread reaching Yuan 158/t, much higher than the average of less than Yuan 20/t in early July.
China's finished steel prices including HRC and rebar rebounded in July amid the positive market sentiment supported by expectations for a macroeconomic policy stimulus package being announced by Beijing, as reported. On the other hand, price growth came to a pause in the second half of August due to the overall weakness in the country's actual steel demand.
The retreat in rebar prices was faster than that of HRC, as demand for construction steel remained poor during the summer off season for steel usage. Meanwhile, rebar output hovered relatively high amid the healthy profit margins of domestic steel mills, which led to the accumulation of inventories at traders' warehouses.
Besides, the sustained downturn in China's real estate sector and the slowdown in infrastructure investment growth have led to a further decline in the country's consumption of construction steel this year.
Statistics released by the country's National Bureau of Statistics showed that during the first eight months, China's fixed asset investment growth slowed to 0.5% on year as against the on-year rise of 3.2% for the whole of 2024, as reported. Funding in the property sector also posted a faster on-year decline of 12.9% compared with the fall of 10.6% in 2024.
On the other hand, China's HRC demand has remained stable this year, mainly thanks to the better performance of manufacturing industries such as automobiles and home appliances, Mysteel Global noted.
For example, China's automobile production and sales both maintained double-digit growth this year, with the total production swelling by 12.7% on year to 21.05 million units over January-August, according to the data from China Association of Automobile Manufacturers. Sales also climbed by 12.6% on year to 21.13 million units.
Domestic consumption of HRC and rebar diverged. Mysteel's latest survey showed that so far this year, China's apparent use of HRC increased slightly by 1.6% from the same period last year, while that of rebar slipped by 4.5% on year during that period.
This also resulted in the divergent trends in inventories of HRC and rebar held by Chinese traders, suggesting a sharp structural divergence in China's steel market.
Mysteel's other survey showed that as of September 11, rebar stocks at the warehouses of traders in the 132 Chinese cities under its tracking reached 7.2 million tonnes, jumping by 33.6% on year, while the total tonnage of HRC at traders' warehouses in the 55 Chinese cities tracked by Mysteel fell by 19.4% on year to 4.03 million tonnes.
Source:Mysteel Global
