[SMM Analysis] The Price Spread Between Galvanized and Cold-Rolled Steel Was Likely to Consolidate at Lows Throughout 2026

• In 2026, the galvanized–cold-rolled price spread moved sideways at lows, significantly below the levels of previous years
  From the beginning of 2026 to date, the galvanized–cold-rolled price spread has remained in an extremely narrow range of 220-300 yuan/mt, averaging 273 yuan/mt, significantly below the average of 414 yuan/mt over the same period in 2025.

SMM Galvanized–Cold-Rolled Price Spread Chart

Source: SMM
Looking back at prior years, the galvanized–cold-rolled price spread in 2023 and 2025 showed clear seasonality: in Q2 each year, the spread shot up rapidly as downstream demand recovered, then gradually pulled back after reaching the annual high around mid-year. However, in 2026 the galvanized–cold-rolled price spread broke this established pattern, staying in a narrow low range throughout the year, with no sharp expansion seen in Q2 of previous years. In H1 2026, the galvanized–cold-rolled price spread basically consolidated within the 220-300 yuan/mt range, with slight fluctuations from January to March; after touching the year’s low in May, it edged up slowly, and even the peak was only close to 300 yuan/mt, significantly below the high levels of 500-800 yuan/mt over the same period in previous years.
The key reason the galvanized–cold-rolled price spread has remained suppressed is the dual constraints from both supply and demand. Supply side, new production lines for galvanizing and Zn-Al-Mg in China were released in a concentrated manner, intensifying industry competition and significantly compressing the upside room for galvanizing processing fees. Demand side, real-estate-related galvanized consumption remained generally weak; while demand from autos and home appliances showed resilience, overall it provided limited growth in demand for galvanized sheet. Exports of galvanized sheet also struggled to fully absorb the new capacity, and the boost from the peak season weakened noticeably. Meanwhile, cost side, cold-rolled substrate supply was ample and prices were also at low levels; fluctuations in zinc prices were unable to fully support the cost of galvanized sheet, and insufficient cost support further constrained the upside room for the galvanized–cold-rolled price spread to fluctuate upward.

•  In H2 2026, the galvanized–cold-rolled price spread is likely to extend the current range or fluctuate slightly upward within a narrow band

Looking ahead to H2 2026, the probability of a sharp rise in the galvanized–cold-rolled price spread is low; under the base-case scenario, it may continue to move sideways within the 260-340 yuan/mt range. If manufacturing orders improve at the margin during the September-October peak season, the spread may have an opportunity to edge up slightly, but upside room is limited due to capacity constraints. If peak-season demand falls short of expectations, the spread will face pressure to pull back to 220-250 yuan/mt. Further sharp narrowing of the spread would lead to larger-scale losses for steel mills, forcing maintenance and production cuts at some galvanizing lines, thereby providing bottom support for the spread. Overall, against the backdrop of overcapacity and weak demand, the galvanized–cold-rolled price spread is unlikely to reach the higher levels seen in previous years, and will more likely fluctuate within a range in line with marginal changes in demand.

Data Source Statement:

(Except for public information, all other data in this report are derived from public information (including but not limited to industry news, seminars, exhibitions, enterprise financial reports, brokerage reports, National Bureau of Statistics (NBS) data, customs import and export data, and various data released by major associations and institutions), market communication, and SMM’s internal database models. They are obtained through comprehensive analysis and reasonable inference by the research team, are for reference only, and do not constitute decision-making advice.

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