Li Zhongshuang: The cold- and hot-rolled coil markets are unlikely to see significant improvement in the short term.
Since entering October, domestic cold, Hot Rolling The coil steel market shows no significant improvement, with sluggish transactions and weak demand—both in cold- and hot-rolled products. Coil plate prices Market conditions remain volatile, with steel traders generally adopting a cautious outlook for the future. On October 17, Li Zhongshuang, General Manager of Shanghai Ruikun Metal Materials Co., Ltd., told a reporter from China Metallurgical News that cold- and hot-rolled coil prices are likely to trade sideways in the near term, though occasional sharp declines cannot be ruled out.
Li Zhongshuang introduced that from October 9 to October 15, the price of hot-rolled Q235B in the Shanghai area dropped by 110 yuan/ton, while the price of hot-rolled SPHC fell by 50 yuan/ton. Cold Rolling Rolled steel prices dropped by 60 yuan per ton. Overall, demand in the plate market remains moderate, with inventories showing a slight increase. From a trading perspective, steel traders generally feel that, despite entering "Golden October," both the cold- and hot-rolled coil markets have yet to experience the typical seasonal surge—demand remains weak and shows no signs of improvement. Aside from essential needs, end-users are not particularly eager to make purchases, with most adopting a wait-and-see approach.
Regarding the future market trends for cold- and hot-rolled coil products, Li Zhongshuang believes that, given the current supply-strong and demand-weak fundamentals, the market for these coils is unlikely to see significant improvement in the short term.
From the demand perspective, recently, production and sales in the automotive and home appliance industries—sectors with significant consumption of cold- and hot-rolled coil—have seen a decline. According to data from the Passenger Car Market Information Joint Association, from October 1 to October 12, nationwide retail sales of passenger cars reached 686,000 units, representing an 8% year-on-year drop. Meanwhile, retail sales of new-energy passenger vehicles across China totaled 367,000 units, down 1% compared to the same period last year.
In the home appliance sector, November production forecasts reveal that domestic air conditioner output is expected to reach 17.14 million units, a 1.5% decrease year-on-year; refrigerator production is projected at 3.76 million units, down 5.8%; and washing machine production is forecast at 3.65 million units, a 3.9% decline from the previous year.
According to industry analysts, during this year’s National Day holiday, retail sales of refrigerators, washing machines, and air conditioners in China hit 2.16 million, 2.86 million, and 2.62 million units, respectively—representing year-on-year drops of 27.1%, 18.4%, and 24.8%, respectively. Retail revenues for these products also declined significantly, falling by 32.6%, 23.3%, and 32.1% year-on-year, to RMB 9.1 billion, RMB 8.2 billion, and RMB 9.3 billion, respectively.
Meanwhile, the export market is also facing challenges, as November production forecasts for household air conditioner exports show a 9.1% decline compared to actual export performance during the same period last year. "Recently, the automotive and home appliance industries have experienced a weakening demand for cold- and hot-rolled coil, which has dampened the momentum supporting price increases in these materials," noted Li Zhongshuang.
From the supply side, recently, steel enterprises remain highly motivated to produce, with output levels staying consistently high. Data from the China Iron and Steel Association show that during the first ten days of October, key statistical steel companies collectively produced 20.32 million tons of crude steel, averaging 2.032 million tons per day—a 7.5% increase compared to the previous ten-day period. Key statistical steel companies have also accumulated significant production figures over this time. Pig iron In October, total steel production reached 18.75 million tons, averaging 1.875 million tons per day—a 3.2% increase compared to the previous ten-day period. Meanwhile, key steel enterprises under statistical monitoring produced a cumulative 19.61 million tons of steel, averaging 1.961 million tons daily, marking an 8.5% decline from the prior ten-day period.
During the same period, steel inventories at these key enterprises climbed to 15.88 million tons, up by 1.21 million tons—or 8.2%—compared to the previous ten-day period. This represents a significant rise of 3.51 million tons, or 28.4%, since the beginning of this year, and a modest increase of 60,000 tons, or 0.6%, compared to early September. Notably, the inventory level also surged by 1.15 million tons, or 7.8%, compared to the same period last year.
With both production and inventory levels on the rise, steel companies are set to release even more resources into the market in the coming weeks, ensuring that supply continues to outpace demand.
Industry insiders indicate that the current production of hot-rolled steel strip by steel companies has not significantly declined. Based on estimated output for November, steel firms do not plan any substantial increase in maintenance activities compared to October. Instead, the partial reduction in supply is largely attributable to ongoing line upgrades and temporary shutdowns for maintenance. As a result, steel producers are expected to maintain high levels of plate output in the near term, which could further lead to Steel Market Continue to strengthen the overall structure.
"Overall, the primary pressure currently facing the domestic hot- and cold-rolled coil markets stems from an imbalance between supply and demand—specifically, higher supply coupled with weaker demand—ultimately leading to an increase in steel inventories." Steel prices "It will be easy to fall but hard to rise," Li Zhongshuang predicts.
