Hot Rolled Coil (HRC) prices in the Chinese market, after an initial period of weak stabilization, experienced a strong rally on Tuesday, July 29, 2025. The most-traded HRC futures contract saw a full-day increase of 2.01%, closing at 3503. This positive momentum was mirrored in the mainstream spot market, where prices rose by 20-80 yuan per metric ton, accompanied by a significantly improved trading atmosphere and overall transaction volumes compared to the previous day.
The futures market's robust reversal from its earlier downtrend boosted market sentiment considerably, leading to an increase in speculative demand. On the supply side, the impact of maintenance on hot-rolled production this week was a decrease of 81,800 metric tons week-on-week, resulting in a 30,900 metric ton impact. 1 While production is expected to fluctuate at a medium-to-high level in the short term, with an anticipated increase in maintenance impact next week, the demand picture remains somewhat mixed. According to SMM surveys, many manufacturing industries are currently in their off-season, experiencing weak new orders and a decline in overall operating rates. Furthermore, the recent rise in steel prices has made some end-users cautious, leading them to adopt a wait-and-see approach and purchase only as needed. Consequently, there remains a slight risk of HRC inventory buildup this week, despite today's positive price movements.
