Hot Rolled Coil Price Trend and Forecast

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Hot Rolled Coil Regional Price Overview

Get the latest insights on price movement and trend analysis of Hot Rolled Coil in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

 

Hot Rolled Coil (HRC) Price Trend for the Second Half of

In the second half of , hot-rolled coil (HRC) steel prices in Europe saw fluctuations driven by a mix of factors, including demand shifts, import controls, and production cost changes. Following a period of relatively weak demand, ArcelorMittal raised its prices for HRC in December, signalling a move to stabilize the market towards the year's end.
 

Hot Rolled Coil (HRC) Price Chart

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The steel market had been under pressure as consumption remained subdued, especially from key sectors like automotive, which had faced production slowdowns. As a result, steel suppliers, including ArcelorMittal, had to carefully adjust their offers in response to market conditions.

In the summer and early fall, prices for hot-rolled coil had already dipped due to a slowdown in order volumes. While some recovery was seen in terms of restocking, the overall demand remained lacklustre, especially in Northern Europe. The European Commission's review of safeguards on imports added a layer of uncertainty, creating cautious optimism among domestic mills about potential reductions in imports. However, the overall sentiment in the steel market was one of caution, as many buyers were wary of committing to higher prices without clearer signals of sustained demand.

Analyst Insight

According to Procurement Resource, the outlook for HRC Steel prices remains uncertain. With import levels likely to stay lower, there could be some support for domestic prices, but weak consumption and ongoing economic challenges may limit significant upward movement. A slow recovery in end-user demand may prevent substantial price gains in the near term.
 

Hot Rolled Coil Price Trend for the First Half of

Product Category Region Price Time Period Hot Rolled Coil Energy, Metals and Minerals China 570 USD/MT January&#;24 Hot Rolled Coil Energy, Metals and Minerals China 529 USD/MT June&#;24 Hot Rolled Coil Energy, Metals and Minerals India INR/MT March

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Asia

Hot Rolled Coil or HRC is a type of steel product that is produced by heating steel above its recrystallization temperature and then rolling it into coils. HRC is capaciously consumed in the construction, manufacturing, and automotive industries. Since HRC is made from steel, the prices are often found following the feedstock steel prices along with the downstream demands from the consuming sectors.

During the second quarter of the year , the hot rolled coils&#; price-performance was observed to be below average in the Asian markets, especially the Chinese market; the monthly average prices went from about 570 USD/MT in January&#;24 to around 529 USD/MT in June&#;24. This marked a decline of approximately 7% in the Chinese HRC market over the said span of six months.

The Chinese market began the year on a lower note since the inventories had already bulked up with excess stocks since the beginning. The Real Estate construction sector was already struggling in the country. Overall, a dull market performance was witnessed for hot rolled coils in the Asian markets.

Europe

The European HRC industry behaved in a varying manner throughout the first half of the year ; the prices had a positive start in January. Limited supply kept European steel hot-rolled coil (HRC) prices elevated despite subdued buying, with Northern European prices continuing to climb slowly but traded volumes remaining limited. Buyers were only purchasing necessary volumes to avoid building stocks.

Deals for domestically produced HRC were mostly at the lower end of the price range. Demand from most end-user sectors, except the automotive industry, remained weak. As the quarters shifted, the price graph steadily became a little flattened. Prices got borderline stability at the beginning of the second quarter.

The trading activity was minimal due to public holidays in several EU states. Northern European mills aimed to keep spot prices high in anticipation of negotiations with the automotive industry for the second half of , thus resisting discounts despite low demand. However, the suppliers were unable to sustain this momentum for longer times. Since the trade volumes remained undesirably low, the suppliers were forced to discount prices around the end of the second quarter because of high stock volumes and persistently low demands.

North America

Hot-rolled coil (HRC) prices in the US declined throughout the first two quarters of the year . The North American market experienced the largest decline, with prices falling substantially since the beginning of the year. Despite a brief increase in mid-March, driven by minimum price targets set by steelmakers like Cleveland-Cliffs and Nucor, the overall trend has been downward. Consumers have refrained from purchasing amid uncertain demand prospects, leading to downward price adjustments.

Analyst Insight

According to Procurement Resource, given the current state of the HRC market, the manufacturers might undertake production cuts in the coming months to attempt to stabilize the global hot rolled coil markets. Not much improvement is anticipated in prices going forward.
 

Hot Rolled Coil Price Trend for the Second Half of

Asia

The H2 of began with the dull momentum of downstream industries, particularly the automotive and construction sectors, which resulted in the downfall of hot rolled coil prices throughout the third and fourth quarters. Another cause of the subdued market trend in the hot rolled coil market was the stagnancy in the growth of the industrial sector and rising inventory levels.

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The economic challenges and rising interest rates further intensified the growing concerns of the traders. During the fourth quarter, consumer sentiments and the other parameters of the market remained on the lower end but the rise in production costs supported the hot rolled coil prices.

Europe

The European countries in the third quarter witnessed a rise in the supply of raw materials required in industrial production of hot rolled coil along with a fall in consumer demand. This imbalance in the supply and demand sectors and the sudden uptick in production cost raised traders' concerns as the market winds moved south. As compared to the third quarter, the fourth quarter trend of hot rolled coil prices was much more stable. Although surplus availability of the product remained a hot topic among the traders, movements in the downstream industries presented positive sentiments.

North America

Throughout the third and fourth quarters of , the hot rolled coil price trend experienced a regular downward trend, compounded by several market parameters. The foremost of these is the reduction in purchase offers and limited spending budget of the consumers amid growing concerns about the economic stability of the region. The cautionary approach of the automotive industries and labor strikes further intensified the struggling market dynamics.

Analyst Insight

According to Procurement Resource, the price trend of Hot Rolled Coil is expected to be on the lower end of the spectrum as the global fluctuations in the functioning of the downstream industries present a bleak condition of the market.
 

Hot Rolled Coil Price Trend for the First Half of

Asia

The Chinese manufacturing sector was supported by the revival of infrastructure and strong production of hot rolled steel coils in the initial months of the first quarter. Some of the manufacturing units went under maintenance shut down in the middle of this quarter, which negatively affected the production rates, and due to high demand, the prices of hot rolled steel coils inclined.

The second quarter, however, struggled with the decline in the cost of feedstocks, festival season, and extreme rainfall that hampered the demand and consumption rates of consumers. These factors, along with the hike in inflation, resulted in the negative movement of hot rolled steel coils prices.

Europe

The first quarter witnessed a significant surge in the price trend of hot-rolled steel coils in European countries. The surge was accelerated by the limited supply and high demand from the construction and automobile industries. The traders also enjoyed the benefit of a lack of imports that decreased the competition in the market.

The initial months of the second quarter also worked on the same path. The second half of the second quarter, however, struggled with the declining economic trajectory and falling demand from the construction and automobile sectors, leading to the decline in the prices of hot rolled steel coils.

North America

The first quarter of hot rolled steel coils prices imitated the trend shown in the European and Asia-Pacific countries. In the US, the trend inclined with the support of rising prices of feedstock materials and an increase in the number of inquiries from the downstream sectors. The second half of the second quarter witnessed a change in winds as the plunging economic conditions increased instability in the prices of hot rolled steel coils that further worsened the debt crisis and inflation rate hike. The consumers, thus, were reluctant to place orders in bulk, resulting in a decline in the price trend of hot rolled steel coils.

Analyst Insight

According to Procurement Resource, the price trend of Hot Rolled Steel Coils is expected to follow a southwards trajectory due to the decline in consumer demand and weak growth of the economy.

Procurement Resource provides latest prices of Hot Rolled Coil. Each price database is tied to a user-friendly graphing tool dating back to , which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.

Market Outlook - Forecasts - World Steel Prices

Year + Steel Price Projections

The note below considers near- and medium-term steel price forecasts - that is, the outlook for world steel prices in and beyond. The forecasts are available for purchase.

The price cycle - MCI view

A notable characteristic of world steel prices is that they are highly cyclical. As can be seen in the chart below, prices move from peak to trough every few years. Looking at pricing for typical steel products such as hot rolled coil (HRC) or reinforcing bar, the latest prominent peaks occurred in August , April and September ; with price troughs occurring in May , February and June . Across these products, the average peak-to-peak or trough-to-trough time over the last 25 or so years works out at ~3-4 years. In our view, the next price peak can be expected around or perhaps . We also forecast that the next pricing trough will occur in mid- or more probably (see below) at end-.

Note: Price data from ISSB. Figures are monthly world average export fob prices, in $ per metric tonne.

It is MCI's view that - at the time of writing (end-) - international steel prices still appear to be declining, dropping from a September high. Other independent observations appear to agree with this view of the steel market outlook, as discussed below.

Supply demand outlook

Another way to consider the pricing outlook is to consider future prospects for the global steel supply-demand balance. In this respect, it is noteworthy that:

• The World Steel Association (worldsteel) consider that global steel demand in will grow by 1.2% over levels (from ~ million tonnes finished products in , to ~ million tonnes). This is equivalent to a increase in global steel consumption of ~21 million tonnes [See Worldsteel, Short Range Outlook October ].
• The OECD meanwhile [see Chairman's statement, 96th Steel Committee meeting reported that an additional 50 million metric tonnes (mmt) of new capacity will enter the market in , bringing world overcapacity to ~573 million tonnes. Even adjusting for yield losses from crude stel to finished steel (perhaps 10%), it is clear that the rate of supply growth (arounf 45 million tonnes) will easily outstrip the rate of steel demand growth (just 25 mt).

On this basis, we judge that year capacity utilisation is likely to fall below levels, leading to further near-term reductions in world steel prices.

Market outlook and - steel price forecasts

Taken together, MCI's judgement regarding the current level of steel prices in the context of the longer-term price cycle; with our assessment of expected changes to the steel supply demand balance in &#; all point to declining steel prices as year unfolds. The MCI projection therefore is that steel prices will continue to fall in early , reaching a trough around mid- or end-. A very gradual return to the next peak in the steel cycle in or will then ensue. The phasing out of free allowances under the EU ETS starting in will accelarate this price recovery in Europe.

Q3 update

In August , Baowu Steel's chairman Hu Wangming warned staff of harsh market conditions that were proving longer and more difficult to endure than previously expected, as China's property downturn shows no sign of recovery. Shipments from China are on track to reach ~100 million tonnes in as producers there scramble to offset the domestic slowdown; and are likely to depress international steel prices for some months to come. Other recent press reports also express concern about the current steel industry downturn noting that the global impact of China's steel overproduction is becoming increasingly evident.

Q4 update

Eurometal reported in early December that expectations of a rebound in European HRC prices the first quarter of next year was being tempered by a persistent lack of demand and by oversupply. See Hopes for European steel price rebound in early . To MCI, this confirms the view that the bottom of the current steel cycle may not now occur until mid- to late-.

For MCI's projected monthly steel prices in H1 and beyond, see our our steel price projections page.

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Metals Consulting International Limited
26th December