Since November 2022, the price difference between hot-rolled coil (HRC) and cold-rolled coil (CRC) in the Chinese market has shown a V-shaped trend. The price difference went from CNY 720/ton in October last year, then converged to CNY 290/ton at the beginning of this year, and now widens to CNY 950/ton in mid-September.

Market experts explained that in the first stage, the demand for CRC drove prices up slowly, and in the second stage, the supply pressure of HRC caused price differences to expand rapidly.

At present, the HRC output of steel mills continues to be high in September, while the CRC output has little room to increase.

Looking forward to October, the Chinese government's production restriction measures may be implemented ahead of schedule, and HRC output will decline significantly. It's estimated price difference will gradually converge and return to a reasonable range.