SMM July 13 News:
The first half of 2026 has come to an end, with China's galvanized steel sheet market facing persistent demand pressure. Most market participants reported weaker order books compared with previous years, as both domestic and export orders declined to varying degrees on a year-on-year basis. Demand performance varied significantly across downstream sectors. How did each end-use segment perform in the first half of the year? And what can be expected for the market in the second half?
Domestic Market
1. Construction Sector: Property Market Remains Weak, Keeping Construction Sheet Demand Under Pressure
According to data from the National Bureau of Statistics (NBS), China's cumulative floor area of new housing starts declined by 22.6% year on year during January-May 2026. The pace of decline showed little improvement compared with last year, indicating that the property market remains in a period of adjustment and continues to weigh on demand for construction-grade galvanized steel sheet.
Order performance during the first half generally followed normal seasonal patterns. Construction activity was constrained by low temperatures during the first quarter, resulting in relatively weak order intake. As temperatures increased in March and April, construction activity gradually resumed, leading to a seasonal recovery in orders. However, with the arrival of hot weather and the rainy season in southern China in June, construction progress slowed once again, causing construction sheet orders to weaken.
2. Home Appliance Sector: Steady End-User Demand Supports Stable Orders
According to NBS data, cumulative production during January-May increased by 4.0% for washing machines, 12.6% for refrigerators, and 0.9% for air conditioners. On the export side, cumulative exports of refrigerators and washing machines both increased by more than 10% year on year during the same period, while air conditioner exports declined by approximately 7%.
Overall, end-user demand in the home appliance sector remained resilient during the first half of the year, providing steady support for demand for galvanized steel sheet. As a result, order performance from the home appliance sector remained relatively stable.
3. Automotive Sector: Auto Market Under Pressure While New Energy Vehicles Continue to Grow
According to data released by the China Association of Automobile Manufacturers (CAAM), China's automobile production and sales totaled 14.993 million units and 15.017 million units, respectively, during January-June 2026, down 4.0% and 4.1% year on year. Among them, new energy vehicle (NEV) production and sales reached 7.438 million units and 7.446 million units, representing year-on-year growth of 6.7% and 7.3%, respectively.
Overall, domestic demand in the automotive market remained under pressure during the first half of the year. Vehicle production and sales both declined from the same period last year, with the conventional internal combustion engine vehicle market continuing to contract, while the NEV segment maintained positive growth. Against the backdrop of relatively weak end-user demand, orders for automotive galvanized steel sheet remained generally moderate during the first half.
Export Market
According to data released by China's General Administration of Customs, cumulative galvanized steel sheet exports during January-May declined by 2.71% year on year.
On the one hand, China's implementation of export licensing requirements for galvanized steel sheet from January affected part of the export trading business. On the other hand, exports of galvanized steel sheet to the Middle East declined following the Israel-Iran conflict that began at the end of February. Meanwhile, the increasing number of anti-dumping measures imposed by overseas markets on Chinese galvanized steel products continued to weigh on export orders.
Outlook for H2 2026
1. Domestic Orders: Seasonal Improvement Expected, but Limited Upside for Overall Demand
During July and August, high summer temperatures are expected to continue affecting outdoor construction projects. In addition, some steel mills and downstream processing plants are expected to schedule summer shutdowns, resulting in a further decline in end-user orders compared with the second quarter.
Beginning in September, cooler weather is expected to improve construction conditions, supporting a recovery in demand for construction-grade galvanized steel sheet. At the same time, inventory replenishment by home appliance manufacturers is expected to gradually increase, providing additional support for galvanized steel sheet production and order intake.
Looking to the fourth quarter, the traditional peak season for automobile production and sales is expected to support demand for automotive galvanized steel sheet. However, as winter approaches, lower temperatures are likely to once again affect infrastructure and property construction activity, leading to weaker demand for construction-grade galvanized steel sheet. Overall, domestic demand is expected to continue exhibiting clear seasonal fluctuations in the second half, with only limited room for a meaningful recovery.
2. Export Orders: A Modest Recovery Is Expected
On the export side, resilient end-user demand in Southeast Asia is expected to continue supporting China's galvanized steel sheet exports. In addition, the market expects post-war reconstruction demand in the Middle East to gradually emerge during the second half of the year, which could generate additional export orders.
Overall, galvanized steel sheet export orders are expected to recover modestly in H2 compared with the first half of the year. However, given the continued impact of overseas trade frictions and persistent uncertainty in the global market, the extent of the recovery is expected to remain limited.
(The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research and decision-making. Customers should make cautious decisions and should not replace their independent judgment with this information. Any decisions made by customers are not related to SMM.)
