Hot-Rolled Coil: Baosteel Raises September Prices as Market Watches for Demand Recovery

Baosteel recently announced its September 2026 domestic sales price policy, with the base prices of several major steel products, including hot-rolled coil, increased by RMB 50/ton compared with August. The adjustment applies to the company's domestic contract sales and reflects its latest assessment of market conditions.

For the HRC market, Baosteel's monthly pricing policy is closely watched because the company is one of China's major steel producers. Although the RMB 50/ton increase is relatively moderate, it indicates that the mill is maintaining a certain level of confidence in the market and is seeking to provide support for steel prices.

The adjustment also comes after several previous price increases this year. This suggests that Baosteel is continuing to adopt a relatively supportive pricing strategy, while keeping the scale of individual increases moderate.

Market Focus Shifts to Downstream Demand

The key question for the HRC market is whether downstream demand can recover sufficiently to support higher prices. HRC is widely used in automotive manufacturing, machinery, home appliances, shipbuilding, construction equipment and other manufacturing sectors. Therefore, the performance of these industries has a direct impact on HRC consumption.

Market participants currently maintain expectations for a gradual improvement in demand. However, stronger mill pricing alone does not necessarily mean that end-user demand has fully recovered. If downstream purchasing is mainly driven by short-term restocking rather than sustained order growth, further price increases could face resistance.

Supply-Demand Balance Remains Important

In addition to demand, the supply side will remain a major factor influencing HRC prices. Steel production levels, inventories and market transactions will determine whether the current supply-demand balance can be maintained.

If steel production remains high while demand recovery is slower than expected, inventories could increase and put pressure on prices. Conversely, if demand improves while mills maintain reasonable production levels, the market could receive stronger support.

Therefore, Baosteel's September price increase can be viewed mainly as a signal of price support and cautious optimism, rather than confirmation of a new strong upward cycle.

Outlook

Overall, Baosteel's RMB 50/ton increase in September HRC prices has provided some support to market sentiment and increased attention on the potential recovery of downstream demand.

In the coming weeks, the market will closely monitor actual downstream purchasing, steel mill production, inventory levels and spot-market transactions. If demand improves alongside stable supply, HRC prices may remain firm or move moderately higher. If demand fails to strengthen, however, price gains could be limited.

In the short term, China's HRC market is likely to remain in a supply-demand balancing phase, with the actual recovery of downstream demand expected to be the key factor determining the direction of prices.