At the beginning of the New Year, China's steel market got off to a stable start. On January 2nd, the first trading day of 2025, the prices of construction steel such as rebar and wire rods in the Shanghai market opened steadily. The price of hot-rolled coil stabilized, the price of medium and heavy plates remained stable, and the price of cold-rolled coil continued to stabilize. On that day, a reporter from China Metallurgical News interviewed Li Zhongshuang, the general manager of Shanghai Ruikun Metal Materials Co., LTD., Liang Taigeng, the general manager of Shanghai Hualei Enterprise Development Co., LTD., and other steel traders. They shared their analysis and prediction of the trend of China's steel market in January 2025.

They introduced that in the last week of 2024, the price of hot-rolled coil in the Shanghai market dropped by 70 yuan per ton, while the price of cold-rolled coil remained relatively stable. Overall, the market trading situation is average. Meanwhile, due to the decline in the prices of coke and coking coal, the support momentum for steel costs has weakened.

They believe that after the continuous fluctuations in the early stage, the cold and hot rolled coil market is expected to stop falling and stabilize by the beginning of 2025. The main reasons are as follows:

First, steel prices have dropped to a low level, and steel enterprises' willingness to hold prices has strengthened. In 2024, the prices of cold-rolled and hot-rolled coil in China will continue to fluctuate and decline. Taking the Shanghai market as an example, the price of 1.0mm cold-rolled steel plate ST12 produced by Ansteel dropped from 4,900 yuan per ton on January 2, 2024 to 4,300 yuan per ton on December 31, 2024, a decline of 600 yuan per ton throughout the year. The price of 5.5mm to 11.75mm × 1500mm ×C hot-rolled coil Q235B produced by Shougang and Ansteel dropped from 4,090 yuan per ton on January 2, 2024 to 3,430 yuan per ton on December 31, 2024, a decrease of 660 yuan per ton throughout the year. The price of 20mm diameter rebar HRB400 produced by Masteel dropped from 3,990 yuan per ton on January 2, 2024 to 3,380 yuan per ton on December 31, 2024, a decrease of 610 yuan per ton throughout the year. The price of HRB400 coil bars with diameters ranging from 8mm to 12mm produced by Yonggang dropped from 4,190 yuan per ton on January 2, 2024 to 3,620 yuan per ton on December 31, 2024, a decline of 570 yuan per ton throughout the year. In the futures market, according to statistics, in 2024, the futures price of rebar dropped by 17.32%, and the futures price of hot-rolled coil fell by 16.92%. Overall, in 2024, the price of steel in China saw a strong decline and a significant drop.

At present, the price of steel in China has dropped to a relatively low level. The profits of steel enterprises have contracted significantly, and their willingness to hold prices has increased. To a certain extent, this is conducive to the stabilization of the prices of cold-rolled and hot-rolled coil in the later period. Li Zhongshuang believes.

Second, the current demand for cold-rolled and hot-rolled coil sheets still shows resilience. At present, the production and sales volume of the automotive and home appliance manufacturing industries, which consume a large amount of cold-rolled and hot-rolled coil, continue to grow. According to data from the China Association of Automobile Manufacturers, in November 2024, the production and sales of passenger vehicles in China reached 3.109 million and 3.001 million units respectively, increasing by 14.9% and 9% month-on-month and 14.9% and 15.2% year-on-year. In terms of home appliances, China's home appliance exports are currently maintaining a high level of prosperity. Data from the General Administration of Customs shows that in November 2024, China exported 377.22 million household appliances, up 13.8% year-on-year. In the first 11 months of 2024, the cumulative export volume reached 4,098,680,000 units, representing a year-on-year growth of 21.3%.

They believe that as the trade-in policy continues to take effect, promotional activities for automobiles and home appliances across the country keep intensifying, and the terminal consumption enthusiasm remains undiminished, driving the accelerated release of demand. According to industry institutions' predictions, in 2025, the consumption of steel in China's machinery, automobiles, energy, shipbuilding, home appliances and other industries will show a growth trend, which will provide effective support for the overall demand for steel, including cold-rolled and hot-rolled coil.

Thirdly, recently, more steel enterprises have been shut down for maintenance, so the supply pressure is not significant. As the weather gets colder and the Spring Festival approaches, more steel enterprises have suspended production for maintenance during this period, resulting in a decrease in steel output. Data from the China Iron and Steel Association shows that in mid-December 2024, the average daily output of pig iron from key steel enterprises under statistics reached 1.813 million tons, a decrease of 1.6% compared with the previous ten-day period. The average daily output of crude steel reached 1.977 million tons, a decrease of 2.3% compared with the previous ten-day period. The average daily output of steel reached 1.968 million tons, increasing by 2.1% compared with the previous ten days.

In terms of inventory, by mid-December 2024, the steel inventory of key statistics steel enterprises was 14.64 million tons, a decrease of 910,000 tons compared with mid-November 2024, representing a decline of 5.9%. As of December 27, 2024, the steel inventory in 35 major markets across the country was 7.6798 million tons, a decrease of 93,400 tons compared with the previous week, representing a decline of 1.2%. Among them, the social inventory of hot-rolled coil was 2.2806 million tons, a decrease of 31,000 tons compared with the previous week, representing a decline of 1.34%. The inventory of cold-rolled coil was 1.0179 million tons, a decrease of 6,000 tons compared with the previous week, representing a decline of 0.59%. They introduced that currently, the spot resources that merchants have are not abundant, and the sales pressure is not significant. They have a strong willingness to hold prices, which will to a large extent curb the decline in the prices of cold-rolled and hot-rolled coil plates in the later period.