The Stainless-Steel Hot Rolled Coil (SSHRC) market in the United States is encountering notable obstacles due to economic difficulties, a decrease in the manufacturing sector, and evolving dynamics in the construction industry. Potential future adjustments in monetary policy may provide some assistance. While certain areas of demand remain strong.

The SSHRC in the United States reported a 1% decrease in prices in the spot market. In the raw material market, nickel - a key component of SSHRC - has seen supply constraints from Indonesia and increased demand from the Philippines. However, these factors have not translated into higher SSHRC prices, suggesting that other market forces are at play. The disconnect between raw material costs and SSHRC pricing underscores the intricate dynamics influencing the stainless-steel market.

The US manufacturing sector, a significant consumer of SSHRC, has shown signs of weakness. The US Manufacturing Index declined in August, falling below the neutral mark for the second consecutive month. This represents the most significant deterioration in the manufacturing sector's health in 2024, with a notable reduction in production ending a six-month growth streak. The contraction in manufacturing activity has likely contributed to the softening demand for SSHRC.

Despite these headwinds, some sectors continue to show resilience. Primary metals manufacturers report strong order books, indicating that demand for SSHRC remains stable in certain critical industries. This suggests that while overall SSHRC demand may be subdued, specific sectors continue to drive consumption.

The construction industry, an important consumer of SSHRC, shows mixed trends. While overall construction spending increased year-on-year in July, it fell slightly from the June due to a slowdown in single-family homebuilding. Confidence in the sector dropped again in August, with lowered expectations for sales, profit margins, and staffing. Project backlogs have decreased as many projects are postponed due to high costs and a slowing economy, especially in the Southern part of USA.

Import dynamics add another layer of complexity to the SSHRC market. Import volumes of long carbon and alloy steel products into the US increased by 0.6% in July, totalling 485,387 tonnes. This influx of imported materials could potentially pressure domestic SSHRC prices. Additionally, preliminary findings from the US Department of Commerce revealed that Taiwan's stainless-steel sheet and strip in coils were sold at prices below normal value, leading to anti-dumping duty administrative reviews.

Looking ahead, the SSHRC market may find some support from potential monetary policy changes. An anticipated 25-basis point interest rate cut by the Federal Reserve could stimulate economic activity, potentially boosting demand for SSHRC in key industries.

As per ChemAnalyst, the outlook for SSHRC in the US market remains cautiously optimistic despite recent challenges. While short-term pressures on SSHRC prices may persist due to manufacturing sector weakness and construction industry volatility, fundamental demand in critical sectors is expected to provide stability.