Compared to the volatility of 2024, 2025 was a relatively stable year for the steel market. Driven by government subsidies that stimulated manufacturing consumption, the proportion of direct supply from steel mills and specialty steel increased, resulting in a corresponding decrease in the supply of general-purpose steel. Market inventory remained below normal levels for most of the year, keeping inventory pressure manageable.
I. 2025 Market Review: Prices, Inventory, and Profitability
1. Price Trends and Fluctuations
Looking at the price trends over the past two years, the market consistently followed a three-stage pattern: prolonged decline, rebound, and narrow-range fluctuation. Neither year experienced a strong start or a traditional “golden March and silver April” peak.
- 2024 Trajectory: Prices fell steadily from the beginning of the year until September (a cumulative decrease of 1,150 yuan/ton). This was followed by a sharp, short-lived rebound at the end of September (+740 yuan/ton in just one week) before falling back into a narrow fluctuation range for the final two months.
- 2025 Trajectory: Prices fell from January to June (a softer cumulative decrease of 590 yuan/ton). A steady rebound continued throughout July (+330 yuan/ton), transitioning into a very narrow fluctuation range from August onward, moving within a tight 100 yuan/ton window over the final five months.
Due to the continuous decline in the first half of the year, the overall price baseline shifted downwards. The average price fell from 4,261 yuan/ton in 2024 to 3,948 yuan/ton in 2025, a decrease of about 7%.
2. The Cold-Rolled vs. Galvanized Gap
While the general price trends of cold-rolled and galvanized steel coils were consistent, the price difference between the two entered an abnormal state. The historical normal price difference is around 300 yuan/ton. However, in 2025, the highest gap was only 200 yuan/ton, dipping as low as -150 yuan/ton. The price difference remained negative until May, averaging just 28 yuan/ton for the entire year.
Cold-rolled steel significantly outperformed galvanized steel this year. This was driven by the booming automotive sector—specifically New Energy Vehicles (NEVs), which surpassed traditional gasoline vehicle sales—compared to a sluggish home appliance industry. Simultaneously, an influx of newly produced galvanized steel coils entered the Central China market at lower prices, suppressing established resource pricing and driving the current gap down to a mere 40 yuan/ton.
| Market Metric (Central China) | 2024 Data | 2025 Data | Variance / Market Note |
|---|---|---|---|
| Average Price Level | 4,261 yuan/ton | 3,948 yuan/ton | -313 yuan/ton (~7% decrease) |
| Maximum Price Fluctuation | 1,150 yuan/ton | 590 yuan/ton | Volatility reduced by nearly half |
| Peak Social Inventory | 25,000 tons | 16,600 tons | -33.6% (Lower market pressure) |
| Annual Average Inventory | 14,100 tons | 12,100 tons | -14.2% sustained reduction |
| CR vs. Galv Price Difference | ~300 yuan/ton (Normal) | 28 yuan/ton (Average) | Fell as low as -150 yuan/ton in early 2025 |
3. Inventory Structure and Trader Profitability
Social inventory of cold-rolled steel coils in Central China peaked early in both years but remained notably lower in 2025. This low inventory pressure was partially due to major mills, like “L Steel Mill,” gradually reducing their general-purpose cold-rolled supply to the region (dropping monthly agency volumes from 2,000 tons down to 1,200 tons). Actual market arrivals hovered between just 2,000 to 3,000 tons per month.
However, steel mills maintained the upper hand in pricing. Over the 12 months, mills adjusted prices higher than the market for 7 months. Throughout the year, mills lowered ordering costs by 320 yuan/ton, while the market saw a larger cumulative decrease in selling prices of 381 yuan/ton. As a result, traders frequently settled at a loss when selling raw coils, forced to rely on processing and value-added services to maintain profitability.
II. Market Outlook for 2026
1. Supply Dynamics: A Changing Landscape
The supply structure is facing a massive shift. In the galvanized sector, the market was already saturated with brands like Baosteel Qingshan, Shanli, Guocheng, Panhua, and Shenlong. The recent entry of Hunan Chengyu Resources (producing 30,000–35,000 tons monthly, with over a third routed to Central China) has intensified price competition. Their significant price advantage has actively eroded the market share of established brands.
In the cold-rolled sector, Hunan Chengyu launched new resources in December 2025 with a planned monthly output of 15,000 tons. While low prices in the Wuhan market have diverted this supply primarily to Changsha and Nanchang for now, their aggressive pricing strategy is expected to significantly alter the cold-rolled supply structure throughout 2026.
2. Demand and Policy Support
Currently, major steel mills in Central China have not issued relevant policies for winter stockpiling. Because demand for cold-rolled thin plates is less affected by seasonality, traders and end-users show little intention to hoard winter stock.
However, macroeconomic policy support remains highly robust. The national subsidy fund injected 300 billion yuan in 2025, heavily driving manufacturing consumption. With national subsidy funds slated to increase further in 2026, manufacturing demand for both cold-rolled and galvanized steel coils will continue to be stimulated.
Summary: While government policies successfully increase baseline demand, the simultaneous transformation of steel mills and the launch of massive new production lines have created an underlying state of oversupply. Moving into 2026, buyers can expect excellent availability but suppliers should brace for increasingly intense price competition.
