January cold-rolled prices may trend weaker.

Overview: In December, the cold-rolled coil market as a whole showed a generally weak and volatile trend. Supply pressure remained limited, but demand performance was only moderate. International markets exhibited divergent trends: prices in some regions rose slightly, while domestic Chinese prices fluctuated narrowly, continuing to put downward pressure on corporate profits. Social inventories continued to decline, while steel mill inventories saw only minor fluctuations. Production levels remained relatively stable, with slight variations. Overall demand remained weak, and end-users showed low purchasing enthusiasm. The automotive industry provided some support, but demand for household appliances may weaken. Taken together, the year-end end-user rush and expectations of macroeconomic policies failed to drive stronger price movements. High inventory levels and weakening seasonal demand are constraining the room for price increases. Looking ahead to January, demand is still in the off-season, and the market remains cautious about future prospects. Therefore, cold-rolled steel prices in January are likely to continue trending weaker.

One,

Figure 1: FOB Export Prices for Domestic Cold-Rolled Steel Sheets—Data Source: SteelLink Data

In December, cold-rolled steel export prices saw a slight rebound as the main trend. According to market feedback, influenced by fluctuations in domestic prices, export quotes rose in December, with export prices hovering around USD 518 per ton. Based on our survey, domestic cold-rolled steel export prices have been experiencing significant fluctuations recently. We expect that in December, cold-rolled steel export prices will remain volatile, staying around USD 519 per ton.

II. Cold-rolled coil supply remained at a high level in December.

In December, the supply of cold-rolled coil remained generally at a high level, with stable and resilient production performance. Although weekly national output experienced slight fluctuations, it consistently stayed at relatively high levels, reflecting strong production enthusiasm among steel mills. At the regional level, the northern region saw a modest increase in output, while the southern region and the East China region maintained broadly stable output levels without significant changes. Capacity utilization rates and start-up rates continued to remain at elevated levels—particularly in the northern region, where the start-up rate remained steady, and in East China, where capacity utilization slightly improved—indicating that supply-side pressures have yet to ease. Industry reports point out that the current high-supply situation is unlikely to be fundamentally reversed in the short term, a trend directly linked to the resilience of production supported by steel mill profits. Overall, this month’s supply volume was ample and slightly higher than expected, providing solid support to the market.

Figure 2: Trend Chart of Capacity Utilization Rate for Cold-Rolled Coil Products. Data Source: SteelLink Data

III. Downstream Demand for Cold-Rolled Steel Coils

(1) Overall demand is moderate, with a slight reduction in inventory being the main trend.

According to monitoring by Japan Net on the 25th across 29 cities, this week’s social inventory of cold-rolled sheet and coil was 216.86 thousand tons, down 4.13 thousand tons from the previous week. Compared with the previous month, it decreased by 10.70 thousand tons. Year-on-year (based on lunar calendar), it increased by 39.61 thousand tons; year-on-year (based on solar calendar), it increased by 50.40 thousand tons. (Unit: 10,000 tons)

According to monitoring by the 25th Japan Net of key cities’ inventories, this week’s social inventory of cold-rolled sheet and coil stood at 242.64 thousand tons, down 3.56 thousand tons from the previous week, down 10.42 thousand tons from the previous month, and up 42.58 thousand tons year-on-year (based on the lunar calendar) and up 53.24 thousand tons year-on-year (based on the Gregorian calendar). (Unit: 10,000 tons)

Figure 3: Trend Chart of Total Inventory of Cold-Rolled Steel Coils. Data Source: Mysteel Data

(2) In November, automobile production and sales showed a significant month-on-month increase.

In November, automobile production and sales reached 3.532 million units and 3.429 million units, respectively, representing month-on-month increases of 5.1% and 3.2%, and year-on-year increases of 2.8% and 3.4%. From January to November, cumulative automobile production and sales totaled 31.231 million units and 31.127 million units, respectively, up 11.9% and 11.4% year-on-year.

In November, the automotive market continued its strong performance. Enterprises seized the policy window of opportunity, maintaining a relatively fast pace of production and supply. On the basis of a high starting point, both monthly and year-on-year production and sales saw growth. Among them, the passenger car market operated steadily, the commercial vehicle market continued to improve, and new-energy vehicles demonstrated robust performance.

Figure 4: Trend Chart of Automobile Production and Sales Data Source: Steel Union Data

(3) The December auto inventory warning index rose month-on-month.

On December 31, 2025, the latest “China Auto Dealer Inventory Warning Index Survey” (VIA) released by the China Automobile Dealers Association showed that the China auto dealer inventory warning index for December 2025 stood at 57.7%, up 7.5 percentage points year-on-year and 2.1 percentage points month-on-month. With the inventory warning index above the boom-bust threshold, the prosperity of the automotive distribution industry has slightly declined.

The auto market in December failed to see the traditional end-of-year sales surge, and the overall trend remained relatively subdued. Although automakers stepped up year-end promotions, coupled with the "Double 12" car-buying festival and the shift of new-energy vehicle purchase tax—from exemption to a 50% reduction—these factors provided some support for monthly sales. However, as signals emerged that the two new policies would be extended through 2026, combined with automakers' introduction of floor-price guarantees for new-energy vehicle purchase taxes, some consumers chose to postpone their car-buying decisions, putting continued downward pressure on end-demand. Overall forecasts indicate that retail sales of passenger vehicles in December will reach approximately 2.2 million units, with annual sales expected to total around 23.55 million units—a level roughly flat compared to 2024.

Currently, dealerships continue to face multiple operational challenges: declining customer traffic, growing market hesitation leading to shrinking demand, and narrowing profit margins on new-car sales. Coupled with additional year-end production targets set by some manufacturers, these factors are exacerbating inventory buildup and tightening cash flow. According to the survey, nearly half of the dealerships achieved annual sales targets at or above 90% (with 15.3% even exceeding their targets), while only 3.5% fell below 50%. Regarding the sales targets set by manufacturers for 2026, dealerships are adopting a cautiously optimistic stance: 41.0% of dealerships expect the targets to be lowered (with 18.1% anticipating a reduction of more than 10%), 33.3% believe the targets will be raised, and the remaining 25.7% predict that the targets will remain roughly unchanged.

Figure 5: Inventory Warning Data for Chinese Auto Dealers—Data Source: SteelLink Data

IV. In December, spot prices for cold-rolled sheet and coil declined weakly.

Figure 6: Trend Chart of the National Average Price for Cold Rolling; Data Source: SteelLink Data

(1) The price spread between hot and cold products narrowed month-on-month, while the price spread for plated cold products widened month-on-month.

In December, the price spread between cold-rolled and hot-rolled steel narrowed month-on-month. As of the end of December, the cold-hot price spread stood at 556 yuan per ton, a decrease of 28 yuan per ton from the previous month. Meanwhile, the price spread for galvanized cold-rolled steel widened, increasing by 26 yuan per ton month-on-month. Judging from recent market conditions, both cold-rolled and hot-rolled steel prices have been relatively weak; however, cold-rolled steel prices generally remained stronger than those of hot-rolled and galvanized steel. It is expected that in January, the price spreads between cold-rolled and hot-rolled steel, as well as between galvanized cold-rolled steel and other products, will likely continue to fluctuate within a narrow range.

Figure 7: Trend Chart of Cold vs. Hot & Plating Price Spread. Data Source: SteelLink Data

(2) Wide Fluctuations in Price Differentials Between North and South—Opportunities Exist for Northern Products to Move Southward

Looking at the overall market in December, the price spread between northern and southern regions has undergone significant adjustments. As of the end of December, the price difference between Guangzhou and Shanghai was 100 yuan per ton, while the price difference between Guangzhou and Tianjin stood at 180 yuan per ton. Judging from these price differentials, there is still a reasonable profit margin for resource circulation across regions, presenting opportunities for resources flowing southward.

Figure 8: Trend Chart of Price Spreads Between Hot and Cold Regions Data Source: SteelLink Data

V. January Steel Market Forecast: 1

On the supply side: In January, long-process and independent steel mills generally saw moderate order intake, with monthly production schedules remaining weak. Some state-owned enterprises reported recently lowering their order acceptance prices to attract orders. Meanwhile, according to market surveys, several steel plants have scheduled maintenance activities for January. It is expected that capacity utilization rates will decline slightly in January, which could help ease pressure on the supply side.

On the demand side: According to Mysteel’s survey, overall orders in the automotive industry have seen a slight increase recently. Currently, 80% of companies are still fulfilling earlier orders without any signs of new orders coming in. At present, there has been a modest reduction in previously accumulated automotive inventory, and some automakers have experienced relatively strong overseas exports, which to some extent has eased the pressure from earlier stockpiles. Looking at the sample companies, commercial vehicle orders in January have contracted relatively more significantly, mainly because as the year draws to a close and with less than two months remaining until the Spring Festival, construction projects and other infrastructure initiatives may face temporary shutdowns, directly impacting new orders for heavy-duty trucks and other commercial vehicles. Meanwhile, among the sample companies reporting new orders, new-energy vehicle manufacturers continue to enjoy relatively robust order demand. As consumer habits shift, downstream consumers in the automotive industry are increasingly using passenger cars as mere transportation tools rather than for personal enjoyment. For instance, models such as Changan Nuo Yuyu and Wuling Mini have largely squeezed out traditional fuel-powered microcars like Honda Fit and Volkswagen Polo from the market. Similarly, the newly added orders also include components suppliers for the automotive industry—particularly those producing generators, transmissions, crankshafts, and connecting rods, which have shown relatively strong growth rates, driven primarily by expanding orders from new-energy vehicle manufacturers. Overall, considering the structure of the industrial sector, steel consumption in the automotive industry is likely to rise further in January.

According to Mysteel’s survey of steel consumption in the home appliance industry, as of the end of December, the overall order situation in the home appliance sector remained roughly flat compared to the previous month. Most companies continued to fulfill their earlier orders without any new orders being added. Affected by seasonal factors, orders for white goods such as air conditioners and refrigerators declined relatively sharply, and downstream orders largely focused on digesting existing inventories. Among the surveyed companies, compressor manufacturers and those producing related hardware components saw order declines that closely matched the magnitude of the decline in white goods orders. Influenced by supply chain conditions upstream and downstream, these trends generally aligned with winter expectations. However, in January, the small-appliance market showed signs of increasing orders. Specifically, orders for appliances that enhance daily quality of life—such as floor scrubbers, robotic vacuum cleaners, and compact washing machines—experienced a noticeable uptick. This reflects, from one angle, growing consumer awareness and appreciation for specialized product segments, as well as an enhanced focus on improving overall quality of life. As for the production capacity utilization rate of home appliances, it remained at a generally moderate-to-high level, with the majority of enterprises still operating below full capacity. Overall, steel consumption in the home appliance sector in January is likely to remain at the same level as in the previous period.

Looking ahead to January, the domestic cold-rolled sheet market is expected to remain under downward pressure and operate at a weaker level. While there is some potential for a slight shift in price centers downward, cost support will help limit the extent of any further decline. The core negative factor stems from the seasonal contraction in demand: as the Spring Festival approaches, downstream factories will gradually shut down and take holidays, significantly shortening the effective purchasing period and causing market trading activity to become increasingly subdued. On the supply side, no major changes are anticipated; however, incoming shipments may increase, and social inventories will enter a buildup phase, putting downward pressure on prices. Although macroeconomic policy expectations may provide some floor support, their ability to boost the market remains limited given the current weak economic backdrop. Market participants remain cautious, with pre-holiday operations focusing primarily on risk management and inventory control. Overall, the January market is likely to consolidate at a weak level amid the interplay between weak demand and strong costs. Key areas to watch include steel mills’ production policies, the pace of inventory accumulation, and sporadic releases of end-user stockpiles ahead of the holiday period.