HRC (SHFE) Intelligence Report

SHFE HRC settled at 3,493 CNY/mt on June 16 — up 2.34% intraday and continuing a gradual recovery from the May 7 low of 3,295 CNY/mt. The China market faces structural oversupply with 410 Mt of HRC capacity (+4% YoY), near-zero mill margins, and 15.9 Mt of new capacity scheduled for 2026. Western markets remain tight behind 50% Section 232 tariffs, creating a bifurcated global market. The US-China HRC spread exceeds $660/mt. With coordinated trade defenses escalating — EU steel safeguard replacement, India safeguard duties, China export licensing — the SHFE price path hinges on whether production cuts materialize to absorb surplus capacity.