[SMM Hot-Rolled Coil Daily Trading] Hot-Rolled Coil Futures Fluctuated Downward, Spot Trading Volume Changed Relatively Small

In January, on the raw material side, iron ore prices edged down narrowly, coke prices underwent several rounds of reductions, and steel scrap prices remained in the doldrums. Under the combined effect, the average cost for steel mills in January fell by 1.3%.

This week, ferrous metals first declined then rose, maintaining an overall sideways movement. Early in the week, a fire accident occurred at the coal washing plant of Shanxi Coking Coal Huozhou Coal Power Jinbei Coal Industry (Shanlang Mine), with the production resumption time yet to be determined, but the impact on the ferrous chain was limited. In the latter part of the week, several real estate companies stated that they were no longer required to report on the "three red lines," indicating a potential relaxation of strict regulatory policies. Additionally, although the inventory of the five major steel products continued to accumulate MoM, the situation was better than in previous years, leading to a recovery in futures. In the spot market, trading was weak when futures were under pressure. However, when the spot-futures price spread narrowed in the latter part of the week, some spot-futures purchase activities emerged. Demand for construction materials declined further, while the manufacturing sector mostly restocked based on demand.

According to SMM data, the average hot-rolled coil production in January 2026 was 3.18 million mt, down about 5% YoY, while the average apparent demand for hot-rolled coils was around 3.18 million mt, down about 4% YoY.