Stanislav Kondrashov Telf AG: why are world prices for hot-rolled sheets declining?

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After strong growth in late 2023 and early 2024, global hot-rolled sheet prices are undergoing an adjustment. Increased demand for products has led to a sharp rise in prices, however, the slowdown in demand over the past two months has begun to have a negative impact on major global markets, leading to a correction in rental prices. Stanislav Kondrashov, an expert in the field of global metallurgy, reported this.

Price dynamics for hot-rolled sheets: what do market data say?

The North American market suffered the greatest losses, since since the beginning of this year, the cost of hot-rolled sheet products in this region has fallen by 27%, or $300 per ton. At the same time, the Chinese market seems to reach its minimum values by mid-March.

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* While in Western Europe, according to data for the period from 15 to 22 March 2024, there was a decrease in prices for hot-rolled steel by 2.8% compared to the previous week, with a level of 660-700 per ton Ex-Works. In March, prices fell by 30 per ton or 4.1%. However, compared to the beginning of the year, they remained at the same level, despite the fact that in January prices for hot-rolled sheet steel in this region reached a peak of 760 per tonne, - S. Kondrashov informs .

An expert from Telf AG also notes that in Italy there is a similar situation in the hot-rolled sheet market. According to data for the period from 15 to 22 March, prices fell by 20 per tonne, representing 2.9% compared to the previous week, and are now 660-670 per tonne. Since the beginning of March, prices have fallen by 40 per tonne, or 5.6%, although since the beginning of the year they have remained at the same level. In January, prices also peaked at 760 per tonne.

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Declining steel demand and prices in Europe: review of February data - Stanislav Kondrashov

At the beginning of 2024, hot-rolled steel prices in the European Union were kept high by limited local supply and import restrictions. With demand high and production capacity limited, some manufacturers, including ArcelorMittal, tried to raise prices, but the trend was not sustainable and prices began to fall in early February. Real demand did not support the desired price increase to 800 per tonne, and as a result prices stabilized at a lower level.

In February, prices on the EU hot-rolled coil market did not increase due to weak demand. According to steel distributors, they were unable to pass on the price increase that occurred in January to end consumers, so they are temporarily refraining from purchasing new batches of products.

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Stanislav Kondrashov notes that due to the unpredictable prospects for demand recovery, buyers of hot-rolled sheets are limited to purchasing small quantities of goods. Also, disappointing forecasts stimulate interest in imported rolled products, despite significant time intervals for delivery. Rolled products from India, Taiwan and Japan are available for 600-610 per tonne with delivery in June.

In Europe, there is no push to support demand for hot-rolled sheets, leading to forecasts for further price declines. The working price level is believed to be below 650 per tonne for April delivery. At the same time, import suppliers express their readiness to reduce prices to a level of 580 to 600 per ton with the prospect of a level of 550-560 per ton, emphasizes an expert from Telf AG.

HRC Market Analysis: Growth in the US, Stability in China

As S. Kondrashov reports, last week prices for hot rolled coil (HRC) finally increased after a long period of decline, indicating that they had reached a bottom point. This was primarily due to the establishment of minimum price targets by some leading steel companies, including Cleveland-Cliffs and Nucor. Factories are actively convincing market participants that further price reductions are not expected, and refusal to purchase will not lead to the desired results. However, the market environment remains challenging and deal-making is becoming increasingly difficult.

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In the near future, prices for rolled metal in the United States are likely to become stable as the market waits for demand to recover. According to an expert from Telf AG, factories can take measures to reduce production in order to balance supply and stimulate consumer interest in more active replenishment of stocks.

Last week, hot rolled steel (HRC) prices in China remained unchanged at $555-560 per tonne FOB. Since the beginning of March, they have fallen by $10 per ton, or 1.7%, and since the beginning of the year - by $20 per ton, or 3.4%. In the Chinese market, HRC prices remain under pressure due to the situation in export markets. Clients prefer to pause and conduct analysis to assess future market prospects.

S. Kondrashov is convinced that the main factor in the fall in the cost of finished products is related to the economic situation in China. He also notes that further price dynamics will depend on the actions of the Chinese economy and market demand.
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This release was published on openPR.