Global Steel Wire Rod Markets Experience Price Drops Amid Falling Demand and Surplus Supply

With the week ending on August 16^th, global Steel Wire Rod markets experienced price declines due to various factors such as low demand and surplus supply. In the US, decreased demand in the housing sector impacted prices, while in Germany oversupply from weak automotive demand led to price decreases. In China, a drop in demand from the construction sector contributed to price decline of Steel Wire Rod.

With the week ending on August 16^th, the prices of Steel Wire Rod decline by 0.4% due to low demand and ample supply. The US Steel Wire Rod market encountered challenging conditions, with increased supply and weakened demand exerting downward pressure on prices. Domestic producers have been forced to lower prices due to surplus inventory levels, even as mills continue to produce material for stock. The US Steel Wire Rod market faced subdued demand as the housing sector grappled with challenges stemming from plummeting housing permits. Elevated borrowing costs continued to impact the housing market and the demand for Steel Wire Rod.

During the third week of August, Steel Wire Rod prices in Germany decreased by 0.4%. European mills reported reduced order volumes, with some sellers providing lead times extending into September. This drop in prices is attributed to an oversupply caused by weaker-than-expected demand from the automotive sector. Suppliers are holding firm on offers on a case-by-case basis, but trading activities remain limited. The automotive and construction industries across Europe are facing weak demand, leading to quite trading and narrower price ranges for Steel Wire Rod in both Southern and Northern Europe. The decline in domestic passenger car production and exports highlights a broader slowdown in the automotive sector impacting Steel Wire Rod demand. Despite ongoing supply increases with new capacity additions, the market remains pressured, causing slight price declines and raising uncertainty about whether demand of Steel Wire Rod will recover or not.

At the close of the week on August 16^th, notable shifts in both supply and demand dynamics in China's Steel Wire Rod market led to a 1.1% price decline. In East China's Jiangsu province, the average production costs for steel made with steel scrap at integrated mills were lower than those for steel produced using hot metal. Despite the increasing prices of raw materials for steelmaking like iron ore, China's fixed asset investment (FAI) in the period of January to July registered a 3.6% year-on-year growth, according to the National Bureau of Statistics (NBS) in China. Within this data, investments in the domestic property sector declined by 10.2% year-on-year. Over the initial seven months, the total area of new property projects launched in China witnessed a 23.2% year-on-year decline, with residential housing projects showing a 23.7% decrease. Throughout this duration, property sales by floor area in the country experienced an 18.6% year-on-year decrease. The reduction in demand from the downstream construction sector played a part in driving the market to lower the prices of Steel Wire Rod.

According to ChemAnalyst, the pricing outlook for Steel Wire Rod is expected to vary by region, with increase in the United States due to seasonal demand may spike in the automotive sector. In Germany, prices may rise because of elevated production expenses like transportation and raw materials. Meanwhile, China is likely to witness heightened demand in construction, driving up both purchases and prices.