SunSirs: Hot Strip and Plate Profits Shrink, and Weekly Production May Decrease (October 13-17)

Price trend

Hot rolled sheet and coil prices fluctuates this week, but are generally down. According to the SunSirs commodity market analysis system, as of October 17, the average domestic hot rolled sheet and coil market price is 3,360 RMB/ton, a 2.12% decrease from the previous week. The average domestic cold rolled sheet market price is 3,952.5 RMB/ton, a 1.727% decrease from the previous week.

Factors influencing price fluctuations:

Fundamentals

According to the latest data obtained by SunSirs, the social inventory of hot rolled steel this week is 298.8 tons, up 21,100 tons from the previous week, and the weekly output is 3.2419 million tons, down 23,000 tons from the previous week; the social inventory of cold rolled steel this week is 1.3968 million tons, up 4,500 tons from the previous week, and the weekly output is 850,600 tons, up 15,400 tons from the previous week.

This week, the inventory of steel billets of the same caliber in Tangshan's major warehouses and ports is 1.3506 million tons, a weekly increase of 27,700 tons. The daily takeaway volume of steel billets from 21 sample enterprises in Tangshan and its surrounding areas is about 39,000 tons, a weekly decrease of 1,000 tons.

This week, the output of the five major steel varieties is 8.5695 million tons, a decrease of 63,600 tons from the previous week. The total steel inventory is 15.8226 million tons, a decrease of 184,600 tons from the previous week. Among them, the inventory at steel mills is 4.5642 million tons, a decrease of 161,400 tons from the previous week, and the social inventory is 11.2584 million tons, a decrease of 23,200 tons from the previous week.

Cost side

Weekly production of hot rolled sheet and coil fluctuated throughout September between 3.1424 million tons and 3.2649 million tons, reaching a peak of 3.2649 million tons in the third week of September. This represents an overall increase of 96,000 tons compared to August, bringing the average weekly production for September to 3.2252 million tons. Following the National Day holiday, weekly production decreased slightly to 3.2329 million tons. From October 3 to October 10, 2025, weekly production decreased by 14,000 tons, a month-on-month decrease of 0.43%. Compared to the same period last year, weekly production increased by 151,000 tons, a year-on-year increase of 4.9%. Currently, TT Steel Plant is cooperating with the converter maintenance, and one rolling line will be overhauled for one day on October 16, which is estimated to affect the output by 15,000 tons; JL Steel Plant's revenue is not good and it is in a loss state. One blast furnace is under maintenance and it is estimated to resume production on November 15; DL Steel Plant is still maintaining full production and profitability; AG Steel Plant's revenue situation has gradually shifted from profitability to a profit-margin state; LG Steel Plant still gives priority to the production of specialty steels, and has fewer general materials scheduled; JY Steel Plant's production is mainly low-alloy and specialty plates; it is expected that the output of hot rolled sheet and coil may increase slightly this week.

Hot rolled strip production began to decline slightly in the second week of October. From October 2nd to October 8th, 2025, weekly production decreased by 51,500 tons, a 2.22% decrease from the previous week. Compared to the same period last year, weekly production increased by 490,900 tons, a 27.62% increase. This weekly decrease was primarily concentrated in North China and Southwest China. In North China, the reduction was primarily concentrated at billet mills, which voluntarily shut down production for maintenance due to insufficient orders during the National Day holiday, resulting in a slight output reduction. Environmental protection restrictions continued to impact production in Southwest China. This week, due to environmental protection restrictions, North China sees an increase in the number of rolling mills undergoing maintenance. While production in other regions is expected to remain stable, overall output is expected to decline significantly.

Market outlook

Market conditions are rapidly changing, and manufacturers are adjusting production plans based on their own circumstances and market demand, taking into account the impact of order intake and profits. Weekly production of mild steel plates, hot rolled sheet and coil, and strip steel saw varying degrees of increase and decrease last week. Hot rolled sheet and coil and hot rolled strip production decreased by 0.43% and 2.22%, respectively, while mild steel plate production increased by 2.17%. The profit and loss situations of production enterprises are different. It is expected that the weekly output of mild steel plates and hot rolled strip steel may decrease slightly this week, and the weekly output of hot rolled sheet and coil may decrease slightly.

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