Posted on 03 Jul 2026
Domestic prices for hot-rolled coil (HRC) in China during this year’s July-December half are likely to post some gains initially before pulling back later in the year – largely on waning export sales – to end the half slightly lower than the H1 average, Mysteel’s interim report on the commodity states.
The half just gone
China's longer-than-usual Chinese New Year holiday break this year over February 15-23 is blamed for this year's spring months of March and April experiencing a slower recovery in end-user steel demand, including that of hot coils, the report notes.
The HRC market gained some momentum in May following a pick-up in demand, only to be impacted by the early arrival of higher summer temperatures nationwide and frequent rainfall in South China that once again restrained steel consumption. This is evidenced by the still-elevated HRC inventories at the 194 commercial warehouses Mysteel tracks nationwide that as of June 25, stood at 4.59 million tonnes, higher by a towering 1.08 million tonnes or 30.6% on year.
Meanwhile, Mysteel assessed the national price of Q235 4.75 mm HRC over January-June at an average of Yuan 3,348/tonne ($493/t), lower by Yuan 22/t from the first six months of last year.
The half ahead
Inventory pressure is likely to be aggravated during the current half to end-December, given that hot coil supply will remain steady while demand is not anticipated to show an improvement, the report indicates.
Over June 18-24, HRC production among the 37 steelmakers Mysteel regularly monitors amounted to 3.01 million tonnes, lower by 0.7% on week but by 8.2% on year, as reported.
"No new hot coil production lines will be added in H2," the report observed. Although profit margins among the mills are currently being squeezed by high production costs, most steelmakers will be unwilling to voluntarily cut their production, with the result that supply will remain relatively loose during the months ahead, the report observes.
On the demand side, steel consumption from the domestic manufacturing sector should retain some resilience, but any pickup will probably be too small to offset the expected decline in HRC exports, the report suggests.
By segment, steel consumption from the auto segment is likely to remain weak this half, as the industry slows its production amid a tepid domestic market and prioritizes inventory offloading to ease the pressure currently felt by manufacturers and dealers, according to the report.
Mysteel's latest survey on auto parts suppliers showed that the projected steel consumption for each in July only averages 3,161 tonnes, far lower than the average for the home appliance sector, which reached 17,294 tonnes per maker. The better performance seen from the white goods sector this month presages seasonal demand for coolers and refrigerators in summer, the report notes. This will fade as the year progresses, it warns.
Regarding HRC exports, over January-May China shipped 6.13 million tonnes to all destinations worldwide, slumping by a huge 35% from the same period last year, due to trade remedy measures taken by countries such as Vietnam and other unfavorable factors, as Mysteel Global reported.
Although Chinese hot coil exporters are seeking new buyers in emerging markets in Africa and South Asia, the overall downtrend for China's HRC exports will persist this half, according to the report.
Moreover, as HRC initially destined for foreign markets will need to be channeled into the domestic market, so market competition at home will be further exacerbated and weigh on prices during H2, the report predicts.
Source:Mysteel Global
