Complexities Flourish as Cold-Rolled Coil Prices Decline in the German Market

The first quarter of 2024 brought significant shifts in the Cold-Rolled Coil market in Germany. Reduced stock levels and improved downstream performance resulted in raw material shortages for consumers in April. This scarcity, exacerbated by a decline in Cold-Rolled Coil production, presented Easter-season challenges. Despite expectations for growth in automotive manufacturing, limited availability of raw materials slowed progress in this crucial sector.

The surge in demand for Cold-Rolled Coil within the automotive industry in Germany, known for its automotive expertise, has been substantial. As a dominant force in the global automotive market, Germany experienced a noteworthy 21.37% surge in new passenger car sales in March, as reported by the Federal Motor Transport Authority (Kraftfahrt-Bundesamt – KBA). This surge is further fuelled by the rising interest in electric vehicles. The recovery of Germany's infrastructure market also influenced the final prices of Cold-Rolled Coils.

Despite the lower prices, demand failed to pick up, leading to very slow trading conditions. Buyers anticipated further price reductions, while producers resisted such drops citing high input costs. Moreover, the automobile sector experienced a decline of 6.23% year on year in March, contributing to the fluctuations in Cold-Rolled Coil prices.

In April, freight charges surged by 17.10%, impacting final prices for Cold-Rolled Coil. The market also faced disruptions due to train driver strikes, further contributing to the pricing dynamics. The domestic market in Germany witnessed a surplus of Cold-Rolled Coil, resulting in weak demand and stiff competition from cheaper Asian counterparts, ultimately influencing prices.

As the month progressed, the decline in Cold-Rolled Coil prices was palpable. Despite this, data from the German Steel Federation (WV Stahl) revealed an increase in German crude steel output by 6% from the corresponding period a year ago, as well as a 10% year-on-year increase in the production of electric arc furnaces.

Furthermore, the European Commission's extension of definitive countervailing duties on stainless steel Cold-Rolled Coil & flat products, with duty rates in place, has added a layer of complexity to the market dynamics. The investigation yielded substantial processing of Indonesian-origin stainless steel in Taiwan, Turkey, and Vietnam for export to the EU, leading to strict monitoring on these imports.

By the end of April, Germany's Cold-Rolled Coil prices continued to decline due to sluggish demand and surplus inventory, despite a stable pricing trend in the pet coke market. These combined factors led to Cold-Rolled Coil prices marking a weekly decrease, reflecting the persistent challenges faced by the market.

In conclusion, the rollercoaster ride experienced by the Cold-Rolled Coil market in Germany underscores the intricate interplay of demand, competition, global trade dynamics, and macroeconomic factors, signifying the need for astute market navigation.