Overview of hot rolled coil and cold rolled sheet price trends

According to the SunSirs commodity market analysis system, as of June 30, the average price of domestic hot rolled coil market was 3210 RMB/ton, up 0.416% month-on-month; the average price of domestic cold-rolled sheet market was 3677.5 RMB/ton, down 1.07% month-on-month. The spread between hot- and cold-rolled products stands at RMB 467/ton.

In June, the coil market trended downward with fluctuations, primarily driven by sluggish end-user demand and overseas tariff policies. Stimulated by the crude steel production controls in the middle of the month, prices rebounded briefly, but overall it was a short-term repair of sentiment.

Policy support, domestic demand rebounds

According to the latest statistics of the China Construction Machinery Industry Association on major excavator manufacturers, 18,202 excavators of various types were sold in May 2025, a year-on-year increase of 2.12%. Among them, domestic sales were 8,392 units, a year-on-year decrease of 1.48%; exports were 9,810 units, a year-on-year increase of 5.42%. From January to May 2025, a total of 101,700 excavators were sold, a year-on-year increase of 17.4%; among them, domestic sales were 57,501 units, a year-on-year increase of 25.7%; exports were 44,215 units, a year-on-year increase of 8.2%. With the acceleration of infrastructure investment and the stimulation of equipment renewal policies, domestic sales of excavators have increased significantly.

According to the analysis of the China Association of Automobile Manufacturers, the automobile trade-in policy continues to be effective, the vitality of domestic consumption is being released faster, and the passenger car market continues to perform well due to the intensive launch of new products by companies and the hot promotion activities of auto shows in many places. In May 2025, the production and sales of passenger cars were 2.313 million and 2.352 million respectively, an increase of 2.5% and 5.8% month-on-month, and an increase of 12.8% and 13.3% year-on-year respectively. From January to May 2025, the production and sales of passenger cars were 11.08 million and 10.996 million respectively, an increase of 14.1% and 12.6% year-on-year respectively. Driven by favorable factors such as the expansion of the trade-in policy and the accelerated implementation of corporate innovation results, the passenger car market continued to perform well, and the terminal market recovered after the holiday.

According to the statistics bureau, in May 2025, China produced 20.812 million household air conditioners, down 1.8% year-on-year; sales were 22.034 million units, up 2.3% year-on-year. Among them, domestic sales were 14.125 million units, up 13.4% year-on-year; exports were 7.909 million units, down 12.8% year-on-year. In May 2025, the national refrigerator production was 8.510 million units, down 3.3% year-on-year; the cumulative production from January to May was 40.713 million units, down 1.5% year-on-year. In May, the national washing machine production was 9.412 million units, up 1.6% year-on-year; the cumulative production from January to May was 49.115 million units, up 9.3% year-on-year. In May, the national color TV production was 15.764 million units, down 9.2% year-on-year; the cumulative production from January to May was 75.493 million units, down 4.9% year-on-year.

Trade frictions and continued increase in tariffs affect exports

According to the latest SMM steel mill export order, the planned export volume of hot rolled coils in June increased by 9.37% compared with the actual export volume in May. At the same time, my country's steel export prices are still relatively advantageous, so it is expected that steel exports in June will remain high year-on-year. At the same time, the risks faced by my country's steel exports are also increasing. First of all, as the product with the highest export tariff of the Chinese government, many of the top five export destinations have launched anti-dumping investigations against China, and more and more anti-dumping products will be investigated in the future. In addition, Trump announced on May 30 that starting from June 4, the 25% tariff on foreign-made steel and aluminum products imported into the United States will be significantly increased to 50%. Although the amount of steel exported directly from China to the United States is limited, the main importing countries of American steel are also the main destinations for my country's steel exports, such as South Korea. According to data, since the 25% tariff was officially implemented, South Korea's steel exports to the United States fell by 20.6% in May this year. With the implementation of the 50% tariff, a sharp decline in South Korea's steel exports to the United States is inevitable. This also puts the domestic steel re-export trade at risk.

Hot rolled coil supply will remain high in June and July, and corporate profits are at risk of being suppressed

Judging from the production forecast for June and July, there is no major maintenance plan for steel mills in July compared with June, and most of them are regular maintenance and production. Although it is difficult for corporate profits to expand, it is also difficult to quickly compress them in the short term. 80-100 yuan/ton has been maintained at the level of 30-45 days. Therefore, as long as profits remain, it is difficult for production to decline significantly. In the future, factory inventory and profit indicators may be the most important observation points. Judging from the major ferrous finished products, the profits of plates and strips are equivalent to those of long products. This also leads to the fact that coated materials are the first priority in molten iron distribution, which is understandable. This also leads to the fact that under the condition of maintained domestic demand, it is difficult to see obvious adjustments between varieties (the reduction in (long) materials is mainly steel, and plates and strips are still mainly hot rolled and medium and thick plates). Therefore, in the absence of policy support, independent reductions will still require more time to adjust and, which has started to put increasing pressure on the market mentality and prices in the off-season.

Market outlook forecast

Judging from the situation in June, domestic consumption is resilient, but market investment and confidence are biased. From the perspective of surface demand, the contradiction will still be in a process of continuous accumulation, and in this process, the supply and demand contradiction may be adjusted by reducing the quantity. The expectation of policy support has weakened.While overseas demand remains stable, it exerts downward pressure on prices, making volume-over-price a dominant strategy. Domestic demand will experience a downward process. Whether from the consumer side or the investment side, these contradictions will gradually manifest themselves. Thus, weakening domestic demand is likely to emerge as the key challenge. The points that need to be paid attention to in the future are: 1. Whether the pressure of steel mills to receive orders will increase in July, and whether prices will fall; 2. The impact of overseas anti-dumping on direct exports (export flow change); 3. The weakening of policy support. From the above 3 points, there will be a large risk accumulation cycle for the entire market in July, and there will be a rapid accumulation of supply and demand contradictions. There is still room for inventory to recover in the future, so the decline in production will ease the contradictions in the market.

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