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Hot-Rolled Coil Futures (HC)

Hot-Rolled Coil (HC) futures on the Shanghai Futures Exchange offer direct exposure to the industrial steel that literally builds the modern world. As one of the most heavily traded metal contracts globally, it provides unmatched liquidity and a unique window into China's massive construction and manufacturing demand. Whether you're a base metals trader looking to diversify or a macro investor tracking global infrastructure trends, this contract deserves a spot on your radar.

Contract Specifications

Specifications are reference values compiled from exchange publications. Margins and price limits adjust dynamically — the exchange's latest announcements prevail.

What Moves Hot-Rolled Coil

• Manufacturing & appliance demand. Unlike rebar which leans heavily on construction, HRC tracks the health of China's manufacturing sector and consumer appliance sales, making it a direct proxy for factory output and consumer goods cycles.
• Export orders and global steel spreads. When domestic demand softens, Chinese mills flood the export market; the spread between domestic HRC and international prices heavily dictates export volumes and pulls local prices up or down.
• Shared cost drivers (ore + coke). While end-demand differs from rebar, HRC shares the exact same raw material cost structure, meaning iron ore and coke volatility will drive both contracts in tandem on the supply side.
• Steel mill product-mix switching. Mills can often tweak their rolling lines to produce either rebar or HRC depending on margins; when one becomes significantly more profitable than the other, supply shifts rapidly, altering the spread.
• Auto and shipbuilding order books. Heavy industry is a massive consumer of coil, so auto production schedules and global shipbuilding backlogs provide leading indicators for medium-term HRC consumption.

Why Traders Watch It

Think of Hot-Rolled Coil as rebar's manufacturing cousin. While rebar gives you pure exposure to China's real estate and infrastructure construction, HRC is the pulse of its industrial machine. At a contract size of 10 metric tons per lot and a tick value of just ¥10 (≈$1.40), it’s highly accessible for retail traders looking to express macro views on Chinese factory output.

The real magic here is the rebar-HRC spread, which is one of the most classic China macro pair trades you can run. By going long one and short the other, you are effectively trading the divergence between Chinese construction and manufacturing. With a price around ¥3,800/ton, a single lot controls ¥38,000 (≈$5,300) of steel, yet the dynamic exchange margin sits at a lean 7–9%, meaning you only need about ¥3,000 (≈$420) to hold a position.

Liquidity is another draw. Although all 12 months are listed, the main contracts cleanly rotate across January, May, and October. Add in a manageable night session from 21:00 to 23:00 Beijing time, and you have a contract that lets global traders participate in Asian industrial flows without staying up all night.

What to Watch Out For

• Liquidity rotation traps. Because the main contracts rotate strictly between Jan, May, and Oct, trading in off-cycle months can dry up instantly. If you don't roll your positions on time, you’ll get trapped in widening bid-ask spreads and severe slippage.
• Policy shocks on emissions and output. Chinese authorities frequently mandate production cuts at steel mills to manage air quality or hit carbon targets. These sudden policy shocks can gap the market open, easily bypassing your stop losses.
• Night session volatility. The 21:00–23:00 window often overlaps with the release of key Chinese macro data or European market opens. This can cause sharp, localized volatility spikes that catch under-margined retail traders off guard.
• Raw material correlation breakdowns. While iron ore and coke dictate baseline costs, sudden export tariff changes or international trade remedies can decouple HRC from its raw materials, invalidating purely cost-based trading models.

Trading HC on XS Select

All XS Select evaluations include HC and every other major Chinese commodity contract, on real Wenhua Finance market data with institutional liquidity. Commission is 2x the exchange standard (open and close) — replicating professional conditions.