SHFE hot rolled coil futures edged 0.29% lower to ¥3,473/mt on June 23, tracking a broader decline in Chinese steel prices as seasonal demand factors weighed. Steel rebar fell more sharply at 0.80% to ¥3,310/mt, reflecting construction sector weakness.
China's construction PMI contracted to 48.7 in June, below the 50-expansion threshold for the third consecutive month. The seasonal monsoon and heatwave across southern China have slowed construction activity, reducing demand for flat steel products used in infrastructure and manufacturing.
China's crude steel output was 93.5 million metric tons in May, up 2.3% year-on-year according to the National Bureau of Statistics (NBS). However, daily output declined from 3.08 Mt/day in April to 3.02 Mt/day in May, suggesting production may have peaked for the year.
Chinese steel exports remain elevated at 10.5 Mt in May, up 14% YoY, but export prices are under pressure. HRC export offers from China are now $535/mt FOB, down from $555/mt in April, as mills compete for market share in Southeast Asia amid regional oversupply.
Chinese seasonal weakness creates a buying window for H2 2026. Global HRC prices tend to bottom in July–August before recovering in September. Consider layering 3-month forward coverage at current levels. Monitor Chinese export prices as the global price floor.