CRC Market Shifts Negative in Germany and China in Mid-September 2024

In mid-September, Germany and China observed a decline in Cold Rolled Coil (CRC) prices, driven by different market dynamics. In Germany, prices dropped by 0.6% as increased crude steel production and a surge in imports led to oversupply, while weak demand from key sectors such as construction and automotive further strained the market. Similarly, in China, CRC prices also fell by 0.6% due to volatility in the steel market and stable supply levels despite reduced output from some mills. With both nations facing challenges from excess supply and soft demand, particularly in the automotive industry, CRC prices are expected to remain under pressure in the near term.

Germany observed a decrease in prices of CRC due to an increase in supply and a decrease in demand during mid-September. Meanwhile, in China, CRC prices declined due to fluctuations in the steel market.

With the week ending on September 13th, Germany's CRC market experienced a decline in price by 0.6%. Moreover, a rise in supply with an increase in crude steel production compared to the previous year. The surge in supply is due to the global steel market, with imports from various countries, especially those dealing with corrosion-resistant products, increasing significantly. This rise in imports is forecasted to further strain market prices, as competition intensifies, leading to higher inventory levels and a slowdown in CRC demand. The downturn in the construction sector in August was primarily attributed to a sharp decline in the housing sector, coupled with decreasing new orders. The automotive industry, a significant consumer of CRC, is also facing a drop in demand, impacting integrated mills that produce automotive-grade materials.

The prices of CRC in China declined by 0.6% due to fluctuations in the steel market on September 13th. Inventory levels in major hubs such as Wuxi and Foshan experienced a small decline compared to the previous month. Although some mills reduced their output, the overall supply remained consistent. The Chinese government temporarily halted the steel capacity replacement program as part of careful industry growth management. Prices of domestic coke and coking coal remained stable, contrary to expectations of an eighth consecutive price drop for CRC. However, there was an increase in coke inventories, and challenges were faced in the seaborne coking coal trade at the China-Mongolia border. Noteworthy expansions are ongoing, with projects by Tsingshan Holding, Shandong Lingang Nonferrous Metals, and Fuzhou Changjin Stainless Steel Co., Ltd. Despite these developments, Jiangsu Wujin Steel Pipes Group experienced decreased production and a decline in revenue. Overall, there was a decrease in demand for CRC due to the traditional off-season, impacting the Chinese automobile industry and international exports. In addition, China's manufacturing industry purchasing managers' index (PMI) decreased to 49.1% in August, a slight drop of 0.3 percentage points from the previous month, indicating a small decline in the sector's overall status, as reported by the National Bureau of Statistics of China.

According to ChemAnalyst, the global market is expected to experience reduced CRC sales. Moreover, Hurricane Francine in Germany may impact the demand for the automobile industry, potentially causing CRC prices to decrease in Europe. Concurrently, in China, a combination of weak market sentiments and adequate product supply may result in a downward trend in CRC prices.