SunSirs: Outlook for the Hot Rolled Coil and Sheet Market Under Numerous New Regulations (August 1-29)

Price trend

According to the SunSirs commodity market analysis system, as of August 29, the average domestic hot rolled coil ans sheet market price was 3,413 RMB/ton, a month-on-month decrease of 0.43%. The average domestic cold rolled coil and sheet market price was 4,000 RMB/ton, a month-on-month increase of 0.755%. The price difference between hot and cold products was around 600 RMB/ton.

Policy supported and domestic demand recovered

According to statistics from the China Construction Machinery Industry Association, a total of 24,625 excavators of all types were sold in June, a year-on-year increase of 62.9%. Domestic sales reached 21,724 units, a year-on-year increase of 74.8%. Export sales reached 2,901 units, a year-on-year increase of 7.6%. Industry insiders predict that annual excavator sales are expected to approach 300,000 units, with annual sales growth expected to exceed 25%.

According to the China Association of Automobile Manufacturers, the continued effectiveness of the trade-in policy, the accelerated release of domestic consumption vitality, coupled with the intensive launch of new products by companies and the vigorous promotional activities at auto shows across the country, had contributed to the continued positive momentum of the passenger car market. According to authoritative data released by the China Passenger Car Association (CPCA), retail sales of the narrow passenger car market in China reached 1.837 million units in July 2025, a year-on-year increase of 6.9% and a month-on-month decrease of 11.9%. Cumulative sales from January to July reached 12.74 million units, a year-on-year increase of 10.2%.

Data from the National Bureau of Statistics shows that China's air conditioner production reached 20.597 million units in July 2025, a year-on-year increase of 1.5%. The cumulative production from January to July reached 183.455 million units, a year-on-year increase of 5.1%. In July, China's refrigerator production reached 8.731 million units, a year-on-year increase of 5.0%. The cumulative production from January to July reached 59.632 million units, a year-on-year increase of 0.9%. In July, China's washing machine production reached 8.774 million units, a year-on-year increase of 2.4%. The cumulative production from January to July reached 68.128 million units, a year-on-year increase of 9.4%. In July, China's color TV production reached 15.897 million units, a year-on-year decrease of 6.5%. The cumulative production from January to July reached 107.822 million units, a year-on-year decrease of 5.5%.

Prices continued to decline, and low-price competition intensified

Since 2025, the spot export price of hot rolled coil and sheet has been on a downward trend for most of the time. According to Mysteel data, the export quotes of mainstream steel mills have fallen to $450-480/ton FOB China, a decrease of about $9/ton from July. Some companies eager to clear their inventory even quoted a low price of $441/ton. Domestic spot prices were also under pressure. For example, in East China, the spot price of Q235B hot rolled coil and sheet (3.0mm*1500mm) in mid-August fell by 50 RMB/ton from the beginning of the month to around 4,150 RMB/ton, and there was still no sign of stabilization.

The trade environment was complex, with international competition and policy disruptions exerting a double squeeze

Escalating international trade frictions have exacerbated export obstacles. The United States, through Section 301, has imposed tariffs on Chinese steel products, bringing the combined tariff rate to 35%, significantly weakening the competitiveness of Chinese hot rolled coil and sheet in the US market. The EU's carbon tariff (CBAM) will be implemented in 2026, prematurely increasing export compliance costs for companies. Meanwhile, competitors such as India and Turkey, leveraging lower production costs, were seizing the Southeast Asian market with prices of $420-430 per ton, further squeezing the survival space of Chinese companies. While some structural opportunities existed, such as continued demand in Vietnam for wide coils ≥1880mm due to anti-dumping duty exemptions, allowing Chinese companies to maintain a small number of orders through specific specifications, this demand was limited in scale and cannot reverse the overall trend.

Future outlook:

On the supply side, as of August 29, steel demand was in the transition period between peak and off-season. Although steel profits had been compressed, steel mills were generally reluctant to reduce production, and the room for output reduction was limited. For rebar, short-term supply is expected to fluctuate around 2.2 million tons/week. Inventory levels continued to increase this month, and total inventory has already exceeded the same period last year. Destocking pressure is expected to be relatively strong in the future, and inventories will remain relatively high year-on-year. On the supply side, steel mills may reduce production slightly more in September than in August, with an average daily decrease of 3,000 tons. On the demand side, domestic manufacturing orders continued to increase at normal levels, and peak season demand remained resilient. Demand for steel products is expected to remain differentiated next month. With the impending implementation of environmental protection production restrictions in Tangshan, ferrous metal prices are expected to fluctuate more, and will remain in a wide range of fluctuations in the short term.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.