As the Lunar New Year approaches, China's hot-rolled steel market is seeing notable supply changes, with increased production from steel mills and a corresponding rise in social inventories. Analysts expect production and inventories to continue growing post-holiday.

Year-end production trends for 2023-2024 aligned with previous years, driven by three factors. The conclusion of steel mill maintenance and winter rebar production shifts restored capacity, while year-end stockpiling demand boosted production. Additionally, improved profitability encouraged mills to ramp up operations.

Social inventories typically decrease in October and rise in January. This rise was linked to year-end stockpiling demand and weaker market demand compared to previous years, with traders reporting lower sales volumes. Furthermore, the hot-rolled steel market throughout 2024 remained below last year's levels, dampening market confidence and prompting many businesses to maintain low inventory levels.