Global Cold Rolled Coil Prices Under Pressure Due to Softening Demand

The global Cold Rolled Coil market faced price declines driven by various regional factors. In the US, prices fell by the end of the third week, influenced by weak demand and economic conditions. US mills maintained steady base prices, anticipating future demand resurgence from potential Federal Reserve rate cuts and infrastructure projects. Meanwhile, in Germany, prices dropped despite strong production growth in June. The supply side remained robust, but market uncertainties and economic pressures affected prices. Furthermore, In China price decline reflected disruptions in supply and demand, seasonal factors, and new standards impacting market sentiment. High temperatures and frequent rainfall weakened construction and manufacturing activities, leading to reduced steel demand and a shift towards just-in-time procurement.

The US Cold Rolled Coil prices have seen a decline of 0.4% with the ending of the third week of July. Various factors such as supply dynamics and economic conditions have contributed to this price drop in the market. Despite this, US mills have not officially adjusted their base prices yet, believing that reducing prices may not necessarily result in increased demand. They are keeping their base prices steady, anticipating a potential resurgence in demand once the Federal Reserve initiates rate cuts and infrastructure projects commence. Despite weak demand leading to historically short lead times, mills have maintained stability in lead times by exhibiting capacity discipline. Nonetheless, buyers hold negotiation power, particularly those placing large orders, securing significant discounts off the base prices. The primary challenge facing the US Cold Rolled Coil market is the persistently low demand, with various market participants acknowledging the sluggish nature of business activities related to Cold Rolled Coil. Distributors and brokers note an oversupply in the market, as buyers exhibit minimal interest in stocking inventories. The overall market sentiment remains bearish, with little optimism for an imminent turnaround in demand for Cold Rolled Coil.      

Cold Rolled Coil prices in Germany decreased by 0.3% with the week ending on 3rd week of July. German crude steel production showed significant growth in June witnessed a remarkable performance, with an 8.9% year-on-year rise. Both converter and electric arc furnace (EAF) production contributed to this growth. Pig iron production also increased, though more modestly. Moreover, Rolled steel production saw year-on-year increase in June. These production upticks indicate a strong supply side, despite the price drop in the Cold Rolled Coil market due to no new orders has been observed so far. Demand for Cold Rolled Coil in Germany has remained steady, with no major changes noted in key sectors like automotive and construction. However, market uncertainties and the broader economic landscape are putting pressure on prices. The automotive sector, a key consumer of Cold Rolled Coil, has displayed mixed performance, influencing market sentiment cautiously. Despite stable demand, the recent price decline suggests ongoing challenges in balancing supply and demand.

Prices of Cold Rolled Coil decreased by 0.2% because of disruptions in supply and demand. Despite a consistent supply in China, the market experienced a slight decline in prices. This stability in supply, along with decreasing prices, indicates an adjustment to lower demand and external economic factors. Furthermore, the demand for Cold Rolled Coil in China weakened in July due to seasonal factors such as high temperatures and frequent rains, which typically reduce construction and manufacturing activities. The implementation of new standards also impacted domestic market sentiment. Consequently, overall steel demand in China softened, resulting in reduced interest among end-users and a shift towards just-in-time procurement strategies for Cold Rolled Coil.

As per a ChemAnalyst, Cold Rolled Coil prices in the USA are set to increase because of growing demand in different sectors. An upcoming recovery in the construction sector is likely to push up sales and prices. Likewise, Germany is considering plans to strengthen its local Cold Rolled Coil industry, which could impact worldwide price trends. Additionally, the growing automotive sector in China is expected to boost global demand for Cold Rolled Coil. This increased consumption from China, a key market, might have a significant impact on global prices and market dynamics.