China’s Breakthrough Hybrid Rolling Line Ignites Global Steel Coil Surge

1. Technological Leap: The World’s First Hybrid Rolling Line

On July 28, 2025, China’s Jiuquan Steel Group launched commercial production at its revolutionary hot-rolled coil facility in Gansu Province—a project engineered by China Metallurgical Group (MCC). The line integrates CSP thin-slab continuous casting with conventional hot rolling, achieving unprecedented efficiency:

• Cost Reduction: 20% lower operating costs versus standalone lines by maximizing existing equipment reuse and cutting energy consumption1.

• Product Flexibility: Enables economical production of ultra-thin high-strength steel (0.8–1.2mm), previously limited by compression ratio constraints1.

• Zero-Downtime Innovation: MCC’s “*Dual-Line 100-Day + Single-Line 6-Month Shutdown*” strategy allowed simultaneous production and construction, slashing delivery time by 25%1.

The project’s AI-optimized hydraulic pipeline installation—completed in 19 days versus the industry-standard 30—exemplifies China’s construction speed1.

2. China’s Off-Season Price Surge: Policy and Demand Catalysts

Defying seasonal trends, China’s steel coil prices rallied sharply in July:

• Price Data: Hot rolled coils (HRC) hit 3,518 RMB/ton (+9.3% from 2025 lows), while futures soared 16%26.

• Driving Forces:

  • “Anti-Internal Competition” Policies: Central government directives to eliminate “low-price disorderly competition” and outdated capacity triggered supply constraints. Regional caps include Tangshan’s 30% sintering cuts and Shanxi’s 600K-ton crude steel reduction39.

  • Mega-Project Demand: The Yarlung Zangbo hydropower project is expected to absorb 120K–200K tons of steel, boosting coil procurement46.

  • Cost Push: Coal price rebounds elevated production costs, forcing mills to raise offers2.

Equities mirrored the optimism: Xining Special Steel’s shares surged 10%, while others like Sansteel Minguang gained 4%3.

3. Global Ripple Effects: Vietnam’s Import Market Heats Up

China’s rally ignited Asia’s spot markets, with Vietnam at the epicenter:

• Import Prices: Vietnamese buyers bid $480–500/ton (CFR) for Q235/SAE1006 HRC—up $22–24/ton in two weeks—as Chinese suppliers pushed offers to $515/ton (CFR)8.

• Trade Tensions: Vietnam’s rumored anti-dumping duties on ≤2000mm-width coils spurred panic buying, while local giant Hoa Phat Group’s impending blast furnace expansion threatens to flood domestic supply post-September8.

4. Inventory and Production Paradox

Despite bullish sentiment, fundamental cracks emerge:

• Inventory Build-Up: National HRC stocks rose 4.38% WoW to 179.68K tons, even as mills trimmed output. SteelHome data shows weekly production fell 3.65K tons to 317.49K tons amid tepid demand710.

• Profit Warning: Analysts caution that rising output could trigger iron ore price hikes, leading to “price gains with margin squeeze” as raw material inflation outpaces finished steel36.

5. Green Steel’s Competitive Edge

Jiuquan’s hybrid line prioritizes sustainability:

• Recycled Inputs: 60–70% scrap metal usage aligns with China’s 2025 mandate for 70% green materials in state projects16.

• Carbon Advantage: Hydrogen-powered plants (e.g., ArcelorMittal) gain traction, offering 22% price premiums in EU markets ahead of carbon tariffs68.

Conclusion: Navigating the New Coil Economy

Jiuquan Steel’s hybrid breakthrough and China’s policy-driven supply crunch have redrawn global coil trade maps. For exporters, opportunities lie in:

• Premium Products: Ultra-thin high-strength coils and pre-painted variants command 20%+ margins18.

• Green Certification: ISO 14404-compliant low-carbon coils mitigate EU carbon border taxes68.

• Vietnam Window: Pre-duty imports could yield 18% profits before Hoa Phat’s September capacity surge8.

As Q3’s “golden season” approaches, coil markets brace for volatility—where technology winners will balance output agility against policy risks.