China HRC Prices Face Further Pressure in November

China's carbon-steel hot-rolled coil market is expected to remain under pressure in November as production rebounds, inventories stay elevated and demand from manufacturing and export markets remains weak, according to Mysteel.

MONTREAL (SteelPrices): China's hot-rolled coil market entered November with several pressures moving in the same direction: steel production has started to recover, inventories remain high, manufacturing activity has weakened and export demand is providing less support.

Mysteel expects these conditions to keep carbon-steel HRC prices under pressure during November unless mills make more aggressive production cuts.

HRC Prices Fell 2.7% in October

Mysteel assessed China's national spot price for Q235B 4.75mm HRC at Yuan 3,220 per tonne ($483/t) on October 30.

The assessment, which includes 13% VAT, was down Yuan 87/t, or 2.7%, from the end of September.

Prices weakened despite maintenance stoppages at a number of steel mills during October.

Weekly HRC production among the 37 Chinese steelmakers regularly surveyed by Mysteel fell to a multi-year low of 2.84 million tonnes during October 8-14, down 86,000 tonnes, or 2.9%, from the previous week.

Those reductions, however, were not enough to bring supply fully back into line with demand.

Production Is Starting to Recover

Hot-coil output began to recover during the second half of October as lower raw-material costs improved steelmakers' margins.

During October 29-November 4, HRC production among the 37 surveyed mills rose to 2.91 million tonnes.

That was up 1.1% from the previous week and 2.7% above the mid-October low of 2.84 million tonnes.

The rebound matters because demand has not improved at the same pace. If production continues rising while buying remains subdued, the market can accumulate excess tonnes and place further pressure on spot prices.

Manufacturing Demand Weakens

Domestic manufacturing activity is another concern for the HRC market.

China's official manufacturing Purchasing Managers' Index fell to 49.3 in October from 50.1 in September.

A PMI reading below 50 indicates that manufacturing activity contracted compared with the previous month.

The National Bureau of Statistics also reported that China's manufacturing production index fell to 49.8 and the new-orders index declined to 49.4 in October.

Mysteel expects demand for HRC from consumer-goods industries such as automotive and white-goods manufacturing to show little improvement during November as seasonal buying slows approaching winter.

HRC Inventories Remain Elevated

Inventories provide another sign that the market remains well supplied.

As of November 5, HRC inventories in the 194 commercial warehouses monitored by Mysteel totaled 4.73 million tonnes.

Stocks were 1.9% lower than the previous week but remained 5.2% above the level recorded a year earlier.

The weekly decline shows that inventories are being drawn down, but their elevated year-over-year level indicates that the market is still carrying more HRC than it did at the same point in 2025.

Exports Offer Less Relief

Overseas sales are also providing less support to Chinese HRC producers.

China exported 1.31 million tonnes of carbon-steel, non-alloy HRC in September, down 14.1% year over year, according to customs data reported by Mysteel.

January-September exports totaled 10.93 million tonnes, down 25.4% from the corresponding period of 2025.

Mysteel expects trade-remedy measures and additional investigations in overseas markets to continue limiting export opportunities.

The lower export volumes matter domestically because steel that is not shipped overseas may remain available for sale inside China unless mills reduce output.

Raw-Material Costs Provide Less Support

Lower steelmaking input costs are another factor weighing on HRC pricing.

Mysteel expects domestic coking coal and coke prices to soften as coal mines previously suspended for safety inspections resume production ahead of the winter season.

Imported iron ore prices are also expected to face pressure amid ample supply.

Falling raw-material costs can help mill margins, but they also reduce the cost floor that often supports finished-steel prices.

Mysteel's broader November steel-market outlook similarly expects China's steel price center to move slightly lower as seasonal demand weakens and raw-material supply becomes more comfortable.

Production Cuts Could Change the Outlook

The main variable to watch is steelmakers' production discipline.

Mysteel's outlook is conditional rather than a guarantee that HRC prices will decline throughout November.

If mills make substantial production cuts, supply pressure could ease more quickly and inventories could fall.

Without stronger output reductions, however, the combination of recovering production, elevated stocks, weaker manufacturing activity, declining exports and softer raw-material costs leaves China's HRC market with limited support.

Source: Mysteel Global; National Bureau of Statistics of China; China Customs.

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