For the Quarter Ending December 2024
North America
The Hot Rolled Coil (HRC) market in North America during the fourth quarter of 2024 is marked by a cautious recovery amid fluctuating demand conditions and evolving pricing dynamics. Prices have shown an upward trend, increasing notably compared to Q3, as major producers like Nucor and Cleveland-Cliffs have adjusted their pricing strategies to reflect improvements in market sentiment. The U.S. manufacturing sector, although still in contraction, has displayed signs of easing, with business sentiment improving, albeit at a slow pace.
Demand in the construction and automotive sectors has been a mixed bag. Construction spending remained steady, supported by job growth in non-residential construction, while the automotive sector benefited from a significant rise in vehicle sales, adding upward pressure on demand for HRC. However, challenges persist, including high interest rates affecting the residential real estate market, leading to a slowdown in housing activity.
Despite a recent boost in production levels, with raw steel output hitting an 11-week high, overall utilization rates reveal that production remains below the year-to-date averages. Seasonal impacts also contributed to a downturn in construction activity during the holidays, which adds to the complexity of the market conditions.
As of late December, the price for HRC (3 mm) DEL in Illinois stands at approximately USD 881/MT. This marks an increase from previous quarters, yet market participants are contending with challenges such as fluctuating supply dynamics and uncertain demand, emphasizing the need for strategic adjustments to navigate these evolving conditions.
APAC
In Q4 2024, the Hot Rolled Coil (HRC) market in the APAC region faced a complex landscape characterized by declining prices and fluctuating demand. Prices for HRC in China showed a decrease compared to Q3 2024, closing the quarter with HR Coil (Q235-1 mm) priced at around USD 517/MT. This downturn was influenced by a combination of factors, including regional economic recovery disparities and the implementation of anti-dumping measures, signalling a trend toward de-globalization. Throughout November and December, HRC prices initially rose due to strong automotive sector demand; however, weak foreign orders and rising delivery times contributed to overall market instability. The national social inventory of hot-rolled steel fell by 3.72% week-over-week as of early December, reflecting active destocking across East, Central, and South China. Meanwhile, increased production post-maintenance and stable coke prices created a balancing effect. The overall market conditions suggest that participants face challenges from inconsistent demand, inventory fluctuations, and broader economic uncertainties as they navigate the evolving landscape in early 2025.
EUROPE
The Hot Rolled Coil (HRC) market in Europe is characterized by fluctuating demand conditions and pricing stability, as industry participants navigate economic uncertainties. In the fourth quarter of 2024, HRC prices have seen a slight uptick compared to Q3, reflecting cautious optimism among producers amid ongoing challenges in the construction and automotive sectors. Demand for HRC in Europe has been subdued, particularly within the eurozone construction industry, where October showed a worsening contraction in activity. While new orders in Italy exhibited slight resilience, Germany, France, and other major markets have continued to face stagnant sales. Manufacturing indices indicate that while the pace of contraction in Germany improved slightly in October, the overall outlook remains bleak. Seasonal impacts, including the New Year holiday period, have contributed to reduced purchasing activity, creating a fragile balance between supply and demand. Market participants face challenges such as limited import options, competition from lower-priced European producers, and ongoing uncertainties in global trade policies. Without significant policy support or a rebound in demand, the HRC market in Europe could continue to encounter difficulties as it moves into 2025. Producers are anticipating price recovery as they announce higher offers, though these have yet to gain traction due to cautious buyer sentiment and regulatory hurdles surrounding imports. As of the end of Q4, the price for HR Coil (3 mm) FD-Ruhr in Germany stands at approximately USD 683/MT.
For the Quarter Ending September 2024
North America
In Q3 2024, Hot Rolled Coil (HRC) prices in North America saw a significant increase, driven by various key factors. The market experienced a strong rise in prices due to heightened demand, alongside supply constraints and rising production costs. This upward trend was especially prominent in the USA, where the most substantial price changes occurred.
Overall, the quarter exhibited a positive trajectory in HRC pricing, showing a considerable increase compared to the same period last year. However, it is worth noting that there was a slight decline of 9% from the previous quarter in 2024 despite the prices raised by the Nucor, reflecting some volatility in the pricing dynamics.
Additionally, an increase in prices was observed between the first half and the second half of the quarter, indicating a consistent upward trend throughout this period. The quarter concluded with the latest price of USD 842/MT of HR Coil (3 mm) DEL Illinois in the USA, signalling a robust pricing environment with a consistent upward sentiment.
Asia-Pacific
In Q3 2024, the Hot Rolled Coils (HRC) market in the APAC region witnessed a significant decline in prices, mainly influenced by several key factors. The quarter saw a challenging environment for HRC pricing, with a notable decrease compared to the same quarter last year. The recent decline from the previous quarter in 2024 has deepened the ongoing downward trend in market prices.
As a significant player in this market, China experienced the most noticeable price fluctuations, with significant drops observed between the first and second halves of the quarter. This dramatic change highlights the broader market dynamics characterized by negative sentiment. Various factors have contributed to this atmosphere, including the lack of effective policy support, the ongoing transition to new national standards, and the repercussions of the slack season, which has negatively affected demand levels. Collectively, these elements have created a difficult environment for market participants, leading to heightened uncertainty and further price reductions.
The latest quarter-ending price for HR Coil (Q235-1 mm) Ex Shanghai in China stood at USD 478/MT, reflecting the prevailing decreasing pricing environment in the region. The quarter was characterized by a notable decrease in prices, highlighting a challenging period for the HRC market in the APAC region, particularly in China.
Europe
In Q3 2024, the Hot Rolled Coils market in Europe faced a significant downturn, with prices declining compared to the previous quarter. This overall decrease from the same quarter last year can be linked to several key factors affecting market prices. There has been weak demand from major end-user sectors, such as automotive and construction, along with issues of oversupply, which have contributed to pricing pressures.
Additionally, the ongoing summer holiday season has dampened overall market activity, leading to limited trading and subdued purchasing levels. Germany has been particularly affected by these changes, experiencing the most significant impact, with prices dropping by 3% from the previous quarter. The correlation in price changes suggests a negative trend, with the market marked by instability and uncertainty.
Seasonal factors have also played a crucial role in these fluctuations, as buyers have become hesitant to restock, choosing instead to wait for clearer market signals before making further commitments. The latest quarter-ending price for HR Coil (3 mm) FD-Ruhr in Germany stands at USD 658/MT, reflecting the prevailing negative sentiment and challenging market conditions.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Hot Rolled Coils (HRC) market experienced a pronounced downturn in pricing, influenced by multifaceted factors. The quarter exhibited a negative pricing environment primarily due to persistent oversupply amidst subdued demand. The steel industry grappled with an imbalance between production and consumption, exacerbated by economic headwinds such as inflationary pressures and rising input costs. Compounded by global competition, the influx of competitively priced imports further intensified domestic price declines.
Focusing on the USA, which witnessed the most significant price changes, the overall trend mirrored a consistent decrease throughout the quarter. The seasonality typically associated with a mid-year uptick in construction and manufacturing failed to materialize, suppressed by market saturation and lacklustre demand recovery. Within Q2, the first and second halves saw a sequential price drop, underscoring the relentless downward momentum.
The correlation in price changes was influenced by lower industrial activity and strategic discounting by mills attempting to clear inventory. This consistent decrease in prices highlights a negative pricing sentiment, driven by an oversupply scenario and external pressures, reflecting an overall adverse environment for the HRC market in North America during this period.
Europe
In the context of Q2 2024, the European market for Hot Rolled Coils (HRC) experienced a relatively stable pricing environment. This quarter was characterized by a combination of subdued demand, cautious buyer behaviour, and competitive pressures from imports, all of which contributed to a largely stagnant pricing trend. The overall market sentiment oscillated between concern over low end-user consumption and cautious optimism stemming from strategic inventory management and controlled supply. A significant influence was the fluctuating cost of raw materials, specifically iron ore and coking coal, which exerted downward pressure on HRC prices. Additionally, the regulatory impact of the European Union's safeguard quota adjustments played a pivotal role in maintaining a delicate balance between domestic supply and international competition. Focusing on Germany, which saw the most pronounced price adjustments, the market trends underscored a consistent decline. Compared to the same quarter last year, prices are dropped reflecting broader market challenges and persistent low demand. When compared to the previous quarter of 2024, the decline mirrored the declining pattern, indicating a continuing trend rather than a sudden shift in market dynamics. The consistent decline observed in Germany indicates a negative pricing environment. Overarching factors such as low demand from key steel-consuming sectors, cautious restocking by buyers, and competitive pressures from non-European suppliers predominantly influenced this trend. Seasonality played a negligible role, with stability being driven more by market fundamentals than by seasonal variations. Correlatively, the prices reflected sustained pressures rather than episodic changes, further affirming the stability in the broader context of market challenges.
Asia-Pacific
The pricing environment for Hot Rolled Coils (HRC) in the APAC region during Q2 2024 has consistently trended downward, influenced by several key factors. The region's market experienced subdued demand across several sectors, exacerbated by competitive pressures from Chinese suppliers. The influx of low-priced imports from China created significant challenges for local producers, leading to a decline in market prices. Additionally, seasonal factors such as the monsoon season adversely affected construction activities, further dampening demand. The persistence of high raw material costs, particularly coking coal, also exerted downward pressure on profit margins, compelling producers to adjust prices accordingly. Specifically in China, which saw the most significant price fluctuations, the overall trend was characterized by a decreasing price trajectory. The moderation in steel demand, particularly from the real estate sector, played a pivotal role in this decline. Seasonality factors, including a traditional off-season for construction, compounded the situation. From the previous quarter of 2024, there was a recorded decrease, indicating a persistent downward trend. Comparing the first and second half of the quarter, the price dropped, underscoring the ongoing challenges in market dynamics. The quarter ended with HR Coil, epitomizing a negative pricing environment dominated by declining trends. The continuous price depreciation throughout the quarter highlights the struggles faced by the steel industry in maintaining stable market conditions amidst fluctuating demand and competitive pressures.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, the North American Hot Rolled Coils (HRC) market demonstrate decline in prices. Various factors influenced the market during this period, including an increase in steel imports, sluggish demand from downstream steel-consuming industries, and disruptions in trade routes. However, the primary reason for the slight decrease in prices was the reduced demand from the automotive sector, as manufacturers faced uncertainties.
Steel mills are experiencing shortened delivery lead times as buyers withdraw due to the awareness of declining coil prices. This has prompted many stockists to replenish their inventories, exacerbating the reduction in prices. Notably, the price of HRC fell by approximately 14% month-on-month and is expected to continue decreasing in March.
Despite the reduced demand from downstream sectors, the market maintained stable prices in the ending week of March, primarily driven by the infrastructural development sector. This sector was supported by green steel and renewable energy projects, which contributed to the overall stability. Additionally, no plant shutdowns were reported in the USA during this period.
Europe
In Q1 2024, Hot Rolled Coils (HRC) prices in the Europe region remained Bearish, reflecting a consistent pricing environment. The European HRC market experienced consistent price declines in both February and March, reflecting persistently low demand and buyer apprehension. Throughout February and March, the European HRC market exhibited a trend of hesitant buying behaviour, with buyers cautious about stockpiling due to uncertainties surrounding near-term prices. During these months, market activity remained subdued, leading to reluctance among buyers to meet the prices set by mills, subsequently affecting the demand for both domestic and imported HRC. The German HRC market faced challenges with weak trading activity, prompting discussions of potential production cuts by producers to combat price declines. A decline in demand for steel hot-rolled coils was notable across the European market, driven by buyer apprehension and market uncertainties, particularly surrounding price stability. As prices continued to fall, consumers adopted a "wait-and-see" strategy, further impacting market activity. The overall sentiment in the European HRC market emphasized the need for a strategic approach to navigate supply and demand dynamics effectively, given the prevailing uncertainties and subdued market conditions. The data for this summary was derived from market reports and indexes, reflecting the overall caution and restraint observed in both domestic and imported HRC markets across Europe, with a specific focus on the German market dynamics.
Asia-Pacific
In Q1 2024, the pricing environment for Hot Rolled Coils (HRC) in the APAC region has been predominantly negative, with prices experiencing a notable decrease with stable movement. Several factors have influenced the market prices during this period. One significant factor is the decrease in demand from the construction and infrastructure sectors, resulting in surplus inventory levels. Additionally, disruptions in trade routes, such as the Panama Canal and the Red Sea, have impacted the availability of HRC, leading to increased freight charges and extended lead times. China has seen the maximum price changes in the APAC region. The overall trend in China has been characterized by stability, with prices remaining relatively unchanged. Seasonality has also played a role, with the winter season and holiday period leading to a decrease in demand from downstream industries. Compared to the same quarter last year, there has been a significant decrease in prices. The percentage change from the previous quarter in 2024 is recorded at -1.2% in China.
