Throughout 2025, China’s hot-rolled coil market remained under structural pressure from “high supply and low demand.” The trend showed a volatile pattern of “decline, brief rebound, and renewed decline,” with only a short-lived recovery in July and August. Weak demand and persistent supply pressure limited any sustained improvement.

On the production side, lower raw material costs in the first half allowed mills to maintain slight profitability, while the second half saw costs rise and some mills incurred losses by October. Overall, average profitability improved compared to the previous year. 

Better margins and weakening rebar demand drove mills to shift capacity toward hot-rolled coils, pushing annual output to an estimated 338 million tons, up 6.12% year-on-year, further intensifying supply pressure.

Demand remained uneven. Exports were hit by anti-dumping investigations and rising global protectionism, with volumes dropping over 20% for the year. Domestic demand, supported by automotive, machinery, and container sectors, grew modestly but could not absorb the rapid supply expansion. 

By mid-December, social inventories climbed to 3.21 million tons, nearly 30% higher year-on-year, weighing on year-end sentiment and creating additional pressure for early 2026.

Overall, the market operated under the combined weight of high output, weak demand, and elevated inventories. Bearish sentiment dominated trading, reinforcing a negative cycle. These structural challenges are expected to persist into 2026, continuing to constrain market performance.