Global Cold Rolled Coil Market declines in Mid-June 2024 Amid Slowdowns

In the U.S., Cold Rolled Coil prices dipped, influenced by manufacturers lowering their asking prices to stay competitive amidst a sluggish construction industry hampered by high interest rates. The situation was further exacerbated by major player Nucor cutting its published spot price, while service centres hesitated to restock.  Germany saw a decline in Cold Rolled Coil prices, driven by reduced automotive sector orders, pushing German steel producers to offload surplus inventory into the spot market. The construction sector, particularly residential building, continued to face challenges, although the rate of decline showed signs of slowing.  In China, Cold Rolled Coil prices decreased with increased inventories at steel mills and weak demand contributing to the decline. Production in Hebei province rose, bolstered by a significant increase in Pig Iron Accumulated Output, improving raw material stocks. Despite these factors, domestic demand remained subdued due to challenges in the real estate sector and a cautious economic outlook.

During the week concluding June 14th, the U.S. Cold Rolled Coil market experienced a setback, with prices dipping by 0.5%. This downturn has cast a shadow of pessimism over the industry. In response to the challenging environment, manufacturers have been forced to reduce their asking prices to maintain their competitive edge. The construction sector, a key consumer of Cold Rolled Coil, continues to struggle under the weight of persistent high interest rates. This ongoing sluggishness in construction activity is further dampening demand for steel products. Adding to the market's woes, major player Nucor has decreased its published spot price, while service centres remain reluctant to replenish their inventories. The sector is grappling with a perfect storm of challenges, including excess supply, gloomy economic projections, and overall instability in the steel market. Consequently, by June 14th, the price of Cold Rolled Coil in Illinois had fallen to USD 1,259 per metric ton, marking a notable decrease from the previous week's figures. This decline serves as a tangible indicator of the current market pressures facing the U.S. Cold Rolled Coil industry.

As the week ended on June 14th, the German Cold Rolled Coil market experienced a 0.7% price decline, reflecting an imbalance between supply and demand. This shift was primarily driven by reduced orders from the automotive sector, prompting German steel producers to redirect surplus inventory to the spot market. Concurrently, the construction industry continued to face headwinds, with residential building activity showing weakness. However, the rate of decline in this sector showed signs of easing. The downward trend in construction price indices served as a clear indicator of the tepid demand for Cold Rolled Coil across Germany. In response to these market dynamics, Cold Rolled Coil prices in the FD-Ruhr region of Germany stabilized at USD 898 per metric ton. This price point reflects the current state of the market, balancing the increased availability of Cold Rolled Coil with the subdued demand from key consuming industries.

During the week ending June 14th, several factors contributed to a 0.2% decline in Cold Rolled Coil prices. Increased inventories at Chinese steel mills, weak demand, and optimized production processes further squeezed profit margins. Amid global market conditions, there was a slight rise in the availability of Cold Rolled Coil, primarily driven by higher production in Hebei province. This increase was bolstered by a notable rise in Pig Iron Accumulated Output, indicating improved raw material stocks across manufacturing sectors. However, domestic demand for Cold Rolled Coil in China remained weak due to challenges in the real estate sector and the broader economy, leading to a cautious business outlook, as reflected in the anticipation index and slower new orders for Cold Rolled Coil. Consequently, prices for Cold Rolled Coil fell slightly, reaching USD 621/MT Ex Tianjin (China).

According to ChemAnalyst, Cold Rolled Coil prices in the USA may poise for an upturn, to be driven by growing demand across various downstream sectors. The construction sector may show signs of potential resurgence, which could spark buying activity and subsequently push Cold Rolled Coil prices higher. Furthermore, Germany's government is reportedly considering measures to reinvigorate its domestic Cold Rolled Coil industry. Such initiatives, if implemented, could contribute to a broader upward trend in global prices. Meanwhile, China's automotive sector continues to expand, potentially leading to a surge in worldwide demand for Cold Rolled Coil. This increased consumption from one of the world's largest markets could exert additional upward pressure on international pricing, potentially influencing future market dynamics across regions, including the USA.