Global Cold Rolled Coil Prices Drop as Demand Falters and Supply Surges

Cold Rolled Coil (CRC) prices in the U.S. declined on August 30^th, following a global trend of falling steel markets. Additionally, in Germany Cold Rolled Coil prices decreased amidst fluctuating raw material costs and sluggish demand. Meanwhile, China also experienced a drop in Cold Rolled Coil spot prices in August, influenced by oversupply issues and reduced market activity.

Cold Rolled Coil prices in the U.S. experienced a downturn of 0.8% on August 30^th due to supply and demand imbalances. Global steel markets' continual decline, along with specific challenges domestically, drove prices down. This downward trend is also observed in other international markets like China, where steel prices have decreased. In the U.S., the Cold Rolled Coil market is significantly impacted by global dynamics, with cheaper imports from countries such as South Korea, China, Indonesia, Vietnam, and Japan adding to the surplus. Domestic Cold Rolled Coil production has not slowed enough to match weakened demand, exacerbating the surplus. Weakness in the U.S. market, especially in the automotive sector, a major Cold Rolled Coil consumer, is apparent, with July new vehicle sales falling by 3% year-over-year. The slowdown in the automotive industry has contributed to the overall weak demand for steel products, including Cold Rolled Coil. Moreover, the construction sector, another significant Cold Rolled Coil consumer, has been slow to recover, further suppressing demand.   

The cost of Cold Rolled Coil in Germany saw a slight decrease of 0.2% in the last week of August. This decline took place against a backdrop of fluctuating raw material expenses, shifting demand patterns, and regional market conditions. Despite attempts by ArcelorMittal to raise prices for long steel products in Europe due to high production costs, response from the market has been weak, especially in Germany where the construction industry is sluggish. The Cold Rolled Coil market in Germany is influenced by larger European trends, particularly the behaviours of leading steel manufacturers like ArcelorMittal, driven mainly by high production expenses. Consequently, demand for Cold Rolled Coil in Germany has been relatively low, leading to a slight price drop. The construction industry, a key consumer of Cold Rolled Coil, has not shown the expected recovery, resulting in stagnant demand.  

On August 30^th, there was a 0.9% decrease in spot prices for Cold Rolled Coil in China. Challenges on the supply side are being encountered, particularly due to a significant reduction in raw material billet prices, which has made market delivery plans more complex. The build-up of inventory in factories has resulted in further price reductions, hinting at ongoing oversupply issues. Traders are facing issues in quoting prices, though not as severe as those faced by factories, highlighting the general weakness in the supply sector, and reflecting the broader economic climate. Additionally, the Cold Rolled Coil market has observed a notable decline, largely influenced by seasonal factors, and reduced market activity. The market is presently in an off-season phase, with decreased demand significantly impacting overall trends. A substantial 11% drop in automobile sales volume in July, in comparison to the previous June, indicates weak demand from the downstream sector. 

According to ChemAnalyst, the United States is experiencing high production rates among enterprises and low operating costs for cold-rolled coils. In Germany, strong market fundamentals are anticipated, along with an increase in trading activities for cold-rolled coils. Meanwhile, in China, elevated inventories of cold-rolled coils within the downstream market may compel producers to lower prices in the domestic market.