[SMM Hot Topic] Small Peak in Capacity Growth Reappears, When Will Capacity Peak Emerge?

• Six hot-rolling lines were commissioned in 2025, mostly in Central and South China.

According to SMM's compilation, as of January 15, 2026, a total of 6 new hot-rolling lines were commissioned by domestic steel mills in 2025, with a combined capacity of approximately 14.96 million mt. As shown in Table 1, the newly commissioned lines are distributed across North, Central, Northwest, and South China, with South, Central, North, and Southwest China each accounting for 16.67%, and Northwest China accounting for 33.33%. By capacity, Central China accounts for the largest share at 29.28% of the newly commissioned capacity, followed by South China at 26.74%.

Table 1 - Summary of Hot-Rolling Lines Commissioned in 2025

*Note: There may be some discrepancies between the rolling mill model, capacity, and the actual situation of the production lines.

• An additional 15.9 million mt of hot-rolling capacity is expected to be commissioned in 2026, with North China accounting for 57.86%.

As of January 15, SMM surveyed and compiled information on hot-rolling lines planned for future commissioning by domestic steel mills. The results are shown in Table 2. Specifically, 15.9 million mt is scheduled for commissioning in 2026, 10.6 million mt in 2027, and another 28.8 million mt with undetermined commissioning dates, totaling 55.3 million mt of future capacity. Domestically, 18 new hot-rolling lines are expected to be commissioned. By region, North China will add 13 lines, Central China 4 lines, and South China 1 line. By capacity, new capacity in North China will account for approximately 70.71% of the total planned capacity, indicating significant future supply pressure in the region. By rolling mill model, the new lines are primarily wide rolling mills over 1700mm, increasing the proportion of wide hot-rolled coil to meet demand from high-end sectors such as construction and shipbuilding. Focusing on 2026, the planned commissioning times are mostly in H1, and the primary region is North China, with 4 lines planned for commissioning, whose new capacity accounts for 57.86% of the total planned capacity for the year. Additionally, 7 hot-rolling lines have not yet announced specific commissioning times, and SMM will continue to track them.

Table 2 - Summary of Hot-Rolling Lines Expected for Future Commissioning

*Note: There may be some discrepancies between the actual capacity of the lines and the currently available public data.

• 2026 Expected to Be the Third Peak in Hot-Rolling Capacity Growth Since 2021, Followed by a Potential Decline

Figure 1 - National Hot-Rolling Capacity Distribution in 2024

Figure 2 - National Hot-Rolling Capacity Distribution in 2025

Figure 3 - Expected National Hot-Rolling Capacity Distribution in 2026

According to SMM statistics, the national hot-rolling capacity commissioned in 2025 was 411.02 million mt. If the newly announced capacity addition plans by steel enterprises proceed smoothly, the national total capacity in 2026 is expected to be approximately 426.92 million mt, an increase of 3.87% YoY. The national total capacity in 2027 is expected to be approximately 426.92 million mt, an increase of 2.50% compared to 2026. Although the hot-rolling capacity growth rate in 2026 is the third peak since 2021, after the growth rate peaked in 2023, hot-rolling capacity growth is expected to struggle to reach rates above 10% again. SMM expects the growth rate of new capacity to decline year by year after 2027!

Figure 4 - Changes in National Hot-Rolling Capacity Over the Past 9 Years

SMM will continue to track the commissioning status of hot-rolling lines at domestic steel mills. For detailed information on line changes, please scan the QR code below.

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