[SMM Analysis] In 2026, the cold-rolled and hot-rolled price spread consolidates at lows, with limited room for upward breakout.

• In 2026, the cold-rolled and hot-rolled price spread has been consolidating at lows, below the 2025 average level.

Since early 2026, the cold-rolled and hot-rolled price spread has been moving sideways in the 450-550 yuan/mt range, with an average of 489 yuan/mt, lower than the 556 yuan/mt average in the same period of 2025.

SMM Cold-Rolled and Hot-Rolled Price Spread Trend Chart

Source: SMM

This year, the cold-rolled and hot-rolled price spread has narrowed significantly compared to last year. The core reason for the weak price spread lies in the mismatch of the supply-demand pattern between cold-rolled and hot-rolled products. Cost side, hot-rolled coil closely follows the raw material side, supported by fluctuations in iron ore and coke prices, providing strong floor support and making prices more resilient. In contrast, the cold-rolled market relies more on downstream manufacturing end-user demand, with overall demand showing clear structural differentiation: domestic sales are weak while export resilience stand out. The domestic market has been a significant drag. According to CAAM data, China's cumulative auto production from January to July 2026 reached 17.567 million units, down 3.7% YoY, with traditional internal combustion engine vehicles continuing to weaken in production and sales. The white goods industry's domestic demand is also sluggish. From January to August, the overall production schedule of the three major home appliances fell 6.3% YoY, with household air conditioner production down over 14% YoY. Terminal home appliance channels continue destocking, and finished product manufacturers have weak willingness to operate. The export side has become the only support for the industry, with auto exports being particularly outstanding. China's cumulative auto exports from January to July reached 6.14 million units, up 66.8% YoY, with NEV exports leading the growth. White goods exports present a differentiated pattern: air conditioner exports are slightly under pressure, while refrigerator and washing machine exports maintained steady growth of 6%-20% YoY, offsetting part of the domestic sales gap. Overall, the growth in auto and white goods exports is limited and cannot offset the significant weakening in China's manufacturing domestic demand. Terminal stockpiling is cautious overall, and speculative demand is missing, causing cold-rolled prices to strugle to catch up with upticks and have greater downside elasticity, making it difficult to follow hot-rolled coil's synchronous strenghening.

• In H2 2026, the cold-rolled and hot-rolled price spread is expected to recover upward but will find it difficult to break the current range.

Overall, in H2 2026, the cold-rolled and hot-rolled price spread will show a phased pattern of consolidating at lows, slight recovery, and difficulty returning to the midpoint, making it overall difficult to break through the 450-550 yuan/mt reasonable profit range. The thin profit pattern for the cold-rolled industry may persist.

However, multiple factors will continue to suppress the recovery height of the price spread, making it difficult to see a trend-based strengthening.

In summary, in H2 2026, the midpoint of the cold-rolled and hot-rolled price spread will edge up slightly. Unless peak-season demand surges beyond expectations and steel mills voluntarily control production and destock, which could boost the price spread to break the current range; if terminal restocking remains weak and domestic demand continues to be sluggish, the price spread may pull back again, and the profit recovery process for the cold-rolled industry will continue to be hindered.

Data Source Disclaimer:

(Other than public information, all data in this report are derived from market communication, combined with SMM's internal database model, comprehensive analysis and reasonable inference by the research team. They are for reference only and do not constitute decision advice.

SMM reserves the right of final interpretation of this disclaimer clause and reserves the right to adjust and modify the content according to actual circumstances.