As of October, the cold-rolled coil (CRC) market in China is characterized by rigid supply, divergent demand patterns, and persistent price volatility.
Regarding supply, steel mill operating rates remain high; only a few mills have undergone short-term maintenance. Furthermore, given the flexibility to adjust CRC production lines and the availability of ample slab inventories, overall reduction in output is very limited.
On the demand and inventory front, downstream manufacturers are generally purchasing based on immediate requirements. While government incentive policies may drive an increase in production within the home appliance sector toward the end of the year, this trend has yet to become significant.
Additionally, demand for high-end steel products, such as those applied for lightweight structures and motor housings in new energy vehicles, remains relatively stable.
At present, market stocks are on the high side, which may constrain any potential rebound in spot prices. Considering production costs, raw material prices are expected to remain weak, though with limited room for further decline. Besides, steel mills’ proactive reduction in the output of low-margin products strengthens CRC prices.
Looking toward the medium to long-term, the profitability of CRC will no longer depend on rising prices and volumes for ordinary steel products. Instead, it will hinge on the transformation and upgrading of the product mix.